In Which One of the Following Situations Is the "Multiplier

question 15

Multiple Choice

In which one of the following situations is the "multiplier" for a given autonomous change in investment spending the largest?

• A) MPS = 0.4, MPM = 0.2, t = 0.25
• B) MPS = 0.4, t = 0.25 and the economy has no foreign trade.
• C) MPS = 0.25, MPM = 0.1, t = 0.2
• D) MPS = 0.25, MPM = 0.1, t = 0.2, and the economy has "foreign "repercussions."

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Definitions:

NICs

Stands for Newly Industrialized Countries, which are nations experiencing rapid economic growth and industrialization.

LDCs

Least Developed Countries (LDCs) are low-income countries confronting severe structural impediments to sustainable development, often characterized by weak socioeconomic indicators.

Population Growth

The increase in the number of individuals in a population over time, due to factors like birth rates exceeding death rates or immigration.

Economic Growth

The increase in the inflation-adjusted market value of the goods and services produced by an economy over time.