Question about open economy multiplier

Assignment Help Macroeconomics

Reference no: EM1369986

In a closed economy, marginal propensity to consume is 0.6. If the economy opens up to the world and marginal propensity to import is 0.4, using the Keynesian model of output determination, the multiplier will:

A) increase by half of its original value.
B) decrease by half of its original value.
C) decrease by a fourth of its original value.
D) now equal zero.
E) now equal infinity.

Reference no: EM1369986

Questions Cloud

Use shared mutex for synchronization and locking mechanism : Execute two programs of matrix multiplication with thread programming. Use the shared mutex for synchronization and locking mechanism.

Keynesian consumption function : Show analytically and show graphically that, in Keynesian consumption function, the average propensity of consumption is always bigger that marginal propensity

Create high-level e-r diagram for hospital : Your first assignment is to work as part of the team of three persons to create high-level E-R diagram for hospital. You conduct interviews with number of hospital administrators and staff to recognize key entities.

Explain what should the carters cover in program : Explain what should the Carters cover in their new employee induction program and how should they covey this information?

Question about open economy multiplier : In a closed economy, marginal propensity to consume .6. If the economy opens up to world and marginal propensity to import is .4, using the Keynesian model of output determination;

Questions on opportunity cost : Economists make decisions by thinking in terms of alternatives. Why do economists thinks there is no such thing as a free lunch?

Create application which simulates functionality of gas pump : Create application which simulates functionality of gas pump. The user enters number of gallons to buy and clicks desired grade.

Explain the effectiveness of discretionary cost centers : Why is it difficult to assess the effectiveness of discretionary cost centers and A superior criticized a sales manager for selling high-revenue and low-profit items instead of lower-revenue but higher profit items.

What is the loss minimizing output level : Global Investment Group operates in a perfectly competitive industry with the following Cost and Revenue data: What is the loss minimizing output level for the firm?

User Account

All Pages