A Reduction in the Marginal Propensity to Import Will Cause

question 40

Multiple Choice

A reduction in the marginal propensity to import will cause

• A)the multiplier to increase and a given change in government spending (G)to have a larger effect on domestic output.
• B)the multiplier to increase and a given change in government spending (G)to have a smaller effect on domestic output.
• C)the multiplier to decrease and a given change in government spending (G)to have a larger effect on domestic output.
• D)the multiplier to decrease and a given change in government spending (G)to have a smaller effect on domestic output.