In an Open Economy,if the Marginal Propensity to Save S

question 12

Multiple Choice

In an open economy,if the marginal propensity to save s = .20 and the marginal propensity to import m = .30,then what should be the foreign trade multiplier?

• A)2
• B)5
• C)3)33
• D)10

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Definitions:

End-user Consumers

Individuals who are the final users of products or services, typically distinguished from intermediaries or resellers.

Subsector

A division of a larger sector or industry, often defined by specific characteristics or types of activities.

NAICS

The North American Industry Classification System, a standard used by federal statistical agencies to classify business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.

Derived Demand

The demand for a product or service that arises not from the direct need or desire for that product, but rather from the demand for another good or service.