In an Economy with No Income Taxes or Imports, the Multiplier

question 263

Multiple Choice

In an economy with no income taxes or imports, the multiplier equals

• A) 1/MPC.
• B) 1/MPS.
• C) 1/(1 - MPS).
• D) 1/(MPC + MPS).

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Definitions:

Balance Of Payments

Documentation of every economic exchange between the people of a nation and international counterparts within a designated period.

International Transactions

Economic exchanges between countries, including the transfer of goods, services, capital, and payments across national borders.

Trade Deficit

A situation in which a country's imports of goods and services exceed its exports.

Investment Income

Income received from investment assets, such as dividends, interest, or rent.