The Foreign-Trade Multiplier Equals the Sum of the Marginal Propensity

question 60

True/False

The foreign-trade multiplier equals the sum of the marginal propensity to import and the marginal propensity to save.

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Definitions:

Dividends

Payments made by a corporation to its shareholders out of its profits.

Expenses

Costs incurred in the operation of a business to generate revenue.

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company’s balance sheet.

Journalizing

The process of recording business transactions in the accounting journals as part of the bookkeeping process.