If the Marginal Propensity to Import Increases, Then the

question 15

Multiple Choice

If the marginal propensity to import increases, then the

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

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Definitions:

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

Lenders

Lenders are individuals or institutions that provide funds to others with the expectation that the funds will be repaid, usually with interest.

Bonds

Fixed-income instruments that represent a loan made by an investor to a borrower, typically corporate or governmental.

Physical Assets

Tangible objects or properties owned by an individual or business that have intrinsic value, such as machinery, buildings, or land.