If the MPC is 0.95 and the MPM is 0.05, the open economy multiplier is 10.
Select one:
True
False
True
Reason
Open economy multiplier = 1/ MPS + MPM
We know that MPS = 1-MPC
So MPS = 1- 0.95 = 0.05
So Multiplier = 1/0.05+0.05 =1/0.10 = 10
If the MPC is 0.95 and the MPM is 0.05, the open economy multiplier is 10....
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Macroeconomic
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