The Open Economy Multiplier Is Calculated as Follows

question 103

Multiple Choice

The open economy multiplier is calculated as follows:

• A)1/[1-(marginal propensity to consume + marginal propensity to invest)]
• B)1/[1-(marginal propensity to consume + marginal propensity to import)]
• C)1/[1-(marginal propensity to consume + marginal propensity to invest + marginal propensity to import)]
• D)1/[1-(marginal propensity to consume + marginal propensity to invest - marginal propensity to import)]

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Definitions:

Industry Giants

The largest and most influential companies within a sector, known for their market domination, innovation, and financial capabilities.

Lower Prices

Lower prices indicate a decrease in the cost that consumers are asked to pay for goods or services, often aimed at boosting sales or competitiveness.

Marketing Mix

The combination of factors that can be controlled by a company to influence consumers to purchase its products, typically includes product, price, place, and promotion.

Right Price

The optimal price point that balances profitability with customer satisfaction and demand, taking into consideration the cost of production, market conditions, and competition.