« previous next »

Author Question: Explain why the multiplier in an open economy is different from the multiplier in a closed economy. ... (Read 72 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?

Addicts to opiates often avoid treatment because they are afraid of withdrawal. Though unpleasant, with proper management, withdrawal is rarely fatal and passes relatively quickly.

Did you know?

Warfarin was developed as a consequence of the study of a strange bleeding disorder that suddenly occurred in cattle on the northern prairies of the United States in the early 1900s.

Did you know?

People often find it difficult to accept the idea that bacteria can be beneficial and improve health. Lactic acid bacteria are good, and when eaten, these bacteria improve health and increase longevity. These bacteria included in foods such as yogurt.

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

Open, or compound The fracture projects through the skin and there is a possibility of infection or Open, or compound The fracture projects through the skin and there is a possibility of infection or
OPEN GLOVING 5 OPEN GLOVING 5
Turn the outlet valve of the canister to the OFF or CLOSED position. Turn the outlet valve of the canister to the OFF or CLOSED position.
Hang the canister from the vehicle’s hood and adjust the air pressure regulator to full OPEN ... Hang the canister from the vehicle’s hood and adjust the air pressure regulator to full OPEN ...
Heart valves in closed position viewed from the top. Heart valves in closed position viewed from the top.
Open and closed comedones of acne Open and closed comedones of acne
Video: Types of disease resistance: innate defenses & immunity

For a complete list of videos, visit our video library