Which of the following statements about the income-expenditure must be true? Other things equal; the multiplier for an open economy with a non-negative marginal propensity to import cannot be larger than for a closed economy. b. the multiplier for a closed economy will be larger, the higher is the marginal tax rate. O c. the balanced budget multiplier is equal to one. Od. an increase in the marginal propensity to save will increase the size of the multiplier. е. an increase in the marginal tax rate causes the PAE curve to become steeper.

Which of the following statements about the income-expenditure must be true? Other things equal; the multiplier for an open economy with a non-negative marginal propensity to import cannot be larger than for a closed economy. b. the multiplier for a closed economy will be larger, the higher is the marginal tax rate. O c. the balanced budget multiplier is equal to one. Od. an increase in the marginal propensity to save will increase the size of the multiplier. е. an increase in the marginal tax rate causes the PAE curve to become steeper.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: A Macroeconomic Theory Of The Open Economy

Section: Chapter Questions

Problem 2QR

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A Moving to another question will save this response. Question 22 All figures in the table below are in billions. Assume that investment, , is not affected by the income GDP level. GDP Consumption + Exports Imports Investment $ 500 $ 525 $ 15 $ 10 550 560 15 10 600 595 15 10 650 630 15 10 700 665 15 10 750 700 15 10 The multiplier for this private open economy is O A. 2.00. O B. 3.33. O C. 2.50. O D. 1.25. A Moving to another question will save this response.