If the Marginal Propensity to Import Increases, Then the

question 235

Multiple Choice

If the marginal propensity to import increases, then the

• A) multiplier will decrease in value.
• B) multiplier will not change in value.
• C) effect on the multiplier will depend on what happens to exports.
• D) multiplier will increase in value.

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Definitions:

Product Decreases

Situations where the output of goods or services declines due to various factors like reduced demand, inefficiency, or resource limitations.

Price Floors

are government-imposed limits on how low a price can be charged for a product, with the aim to ensure fair compensation for producers.

Price Ceilings

Price Ceilings are government-imposed limits on how high a price can be charged for a product, service, or commodity, often implemented to protect consumers from excessively high costs but can lead to shortages.

Equilibrium Price

A price where the supplied goods quantity is identical to the demanded goods quantity.