The Use of 1/MPS Formula as the Size of the Multiplier

question 142

Multiple Choice

The use of 1/MPS formula as the size of the multiplier in the economy, overstates the actual size of it because:

• A)saving is not the only fraction of the domestic income which is not spent.
• B)saving is the only fraction of the domestic income which is not spent.
• C)imports and taxes create new income in the economy.
• D)imports and not taxes creates new income in the economy.

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Definitions:

Certified Mail

A postal service that provides the sender with a mailing receipt and electronic verification that an article was delivered or attempted to be delivered.

Bankruptcy Proceedings

Legal processes initiated by or against an insolvent individual or business to resolve debts under the supervision of a court.

Legal Proceeding

A sequence of actions conducted formally in a court of law for the resolution of disputes or criminal charges.

Bankruptcy Trustee

An individual or entity appointed in bankruptcy cases to represent the interests of the bankruptcy estate and the creditors, managing the debtor's property and dividing it among the creditors.