Home › Bihar Board Class 12 (Arts) › Economics › Open Economy Macroeconomics › Given a consumption propensity of 0.8 and an imp…
Given a consumption propensity of 0.8 and an import propensity of 0.3, the open multiplier is
A5
B0.5
C2
D3.33
Answer & Solution
Correct answer: C. 2
The multiplier is 1/(1 - 0.8 + 0.3) = 1/0.5 = 2.
Related questions
Which of these is part of the current account as per the BoP definition?If outflows exceed inflows, all else equal, a currency is likely to come under pressure toAfter Bretton Woods, the principal de facto reserve currency has been theA stronger currency tends to make a nation's exportsWho developed the theory of comparative advantage?Which 1997 event led emerging economies to rethink reliance on free markets?A BoP crisis occurs when a nation cannot pay forThe Bretton Woods system came to an end between which years?