In Reality, the Simple Spending Multiplier [1/(MPS+MPI)] Is Applicable Only

question 31

True/False

In reality, the simple spending multiplier [1/(MPS+MPI)] is applicable only to countries whose imports are a substantial fraction of income in foreign countries.

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Definitions:

Geegaws

Decorative trinkets or gadgets, often considered unnecessary or frivolous.

Utility Function

An illustrative model that shows the way individuals prioritize various combinations of products based on their contentment levels.

Coconuts

The large, brown, hard-shelled seeds of the coconut palm, used for food, oil, and as a source of material.

Fish

Aquatic vertebrates that live in water, breathe with gills, and typically have fins and scales.