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When Prices Are Fixed and There Are No Imports or Income

question 205

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When prices are fixed and there are no imports or income taxes, the value of the multiplier is


Definitions:

Domestic Price

The price of goods or services within a country’s borders, as opposed to international or foreign prices.

Export

The selling of goods or services produced in one country to buyers in another country.

Autarky Price

The autarky price is the price of a good in a country that is completely self-sufficient and does not engage in international trade for that good.

Total Surplus

The sum of consumer surplus and producer surplus in a market, a measure of the overall economic benefit to society.

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