In an Open Economy, the Size and Effectiveness of the Multiplier

question 84

Multiple Choice

In an open economy, the size and effectiveness of the multiplier _____.

• A) is relatively high because imports always exceed exports in an open economy
• B) is relatively lower because exports are an injection in the circular flow of income
• C) is relatively higher because the marginal propensity to export is higher
• D) is relatively lower because imports are a leakage from the circular flow of income

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Definitions:

Black Laws

Legislation passed in the United States during the 19th century, particularly in the North, that restricted the freedoms and rights of African Americans.

Midwestern States

A group of states in the central and northern portions of the United States known for their agricultural and industrial output.

Black Hawk War

The Black Hawk War was a brief conflict in 1832 between the United States and Native American forces led by Black Hawk, a Sauk leader.

Old Northwest

A historical term referring to the territory in the north-central United States that was covered by the 1787 Northwest Ordinance, including what is now Ohio, Indiana, Illinois, Michigan, Wisconsin, and part of Minnesota.