In an Open Economy, the Multiplier Is 1 Divided By

question 104

Multiple Choice

In an open economy, the multiplier is 1 divided by:

• A)MPS + MPM.
• B)MPS.
• C)MPM.
• D)MPC.

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Definitions:

Goods

Physical items that satisfy human wants or needs, which can be bought, sold, or traded.

Maximizing Utility

The process or goal of obtaining the highest level of satisfaction or benefit from the consumption of goods and services, given constraints like income.

Utility

A measure of satisfaction, usefulness, or value that an individual or society derives from a good or service.

Consuming

The act of using up goods or services either by purchasing or utilizing them.