Imports

question 16

Multiple Choice

Imports

• A) increase the size of the multiplier because imports make disposable income less than real GDP.
• B) decrease the size of the multiplier because spending on imports does not increase real GDP in the domestic nation.
• C) increase the size of the multiplier because imports are paid for by exports.
• D) decrease the size of the multiplier because imports lead to an increase in taxes and government purchases.

---

Definitions:

Credit Sale

A transaction where the goods or services are provided to the customer with the agreement that payment will be made at a later date.