If MPC=0.8 and MPM=0.05,the Foreign Trade Multiplier Is

question 24

Multiple Choice

If MPC=0.8 and MPM=0.05,the foreign trade multiplier is:

• A) 5
• B) 4
• C) 3
• D) 2

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Definitions:

Cash Flow

Cash flow refers to the net amount of cash being transferred in and out of a business, indicating its financial health.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment, by discounting future cash flows to their present value and subtracting the initial investment cost.

Canadian Dollars

The official currency of Canada, denoted as CAD.

Mexican Pesos

The currency of Mexico, used in financial transactions within the country.