If the Marginal Propensity to Import Increases, Then the

question 340

Multiple Choice

If the marginal propensity to import increases, then the

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

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Definitions:

Equilibrium Price

The price at which the quantity of a product offered is equal to the quantity of the product in demand.

Government Imposes

Refers to regulations, taxes, or policies that a government enforces or puts into effect in order to manage the country's affairs.

Floor

The minimum price or wage level that is legally or otherwise formally set, below which the actual price or wage cannot fall.

Equilibrium Price

The selling rate at which the number of products on offer is the same as the number of products wanted.