« previous next »

Author Question: Explain why the multiplier in an open economy is different from the multiplier in a closed economy. ... (Read 58 times)

HudsonKB16

  • Hero Member
  • *****
  • Posts: 535
on: Jun 30, 2018
Explain why the multiplier in an open economy is different from the multiplier in a closed economy.
 
  What will be an ideal response?

Question 2

The natural rate of interest is not
 
  A) zero.
  B) the neutral rate of interest.
  C) Wicksellian rate of interest.
  D) associated with the natural rate of unemployment.


morrie123456

  • Sr. Member
  • ****
  • Posts: 314
Reply #1 on: Jun 30, 2018
Answer to Question 1

In a closed economy, the effects of any change in Y on demand all falls on domestic goods. In an open economy, some of the increased spending falls on imports. So, the final change in Y will be smaller in an open economy because of the existence of the marginal propensity to import.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Walt Disney helped combat malaria by making an animated film in 1943 called The Winged Scourge. This short film starred the seven dwarfs and taught children that mosquitos transmit malaria, which is a very bad disease. It advocated the killing of mosquitos to stop the disease.

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

Carbamazepine can interfere with the results of home pregnancy tests. If you are taking carbamazepine, do not try to test for pregnancy at home.

Did you know?

Green tea is able to stop the scent of garlic or onion from causing bad breath.

Did you know?

Your heart beats over 36 million times a year.

How stomatal pores open and close. How stomatal pores open and close.
Left coronary artery (only seen if auricle is open) Left coronary artery (only seen if auricle is open)
Creede, Colorado, circa 1890, a rough silver mining town that grew from 660 people in 1889 to over 1 Creede, Colorado, circa 1890, a rough silver mining town that grew from 660 people in 1889 to over 1
Draw and label a diagram and explain how a factor-dependent transcription (rho-dependent) terminator Draw and label a diagram and explain how a factor-dependent transcription (rho-dependent) terminator
Growth in Closed Economies Growth in Closed Economies
Please fully explain the answer with steps Please fully explain the answer with steps
Video: HDL (high density lipoprotein)

For a complete list of videos, visit our video library