« previous next »

Author Question: Explain why the multiplier in an open economy is different from the multiplier in a closed economy. ... (Read 82 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?

The toxic levels for lithium carbonate are close to the therapeutic levels. Signs of toxicity include fine hand tremor, polyuria, mild thirst, nausea, general discomfort, diarrhea, vomiting, drowsiness, muscular weakness, lack of coordination, ataxia, giddiness, tinnitus, and blurred vision.

Did you know?

Patients should never assume they are being given the appropriate drugs. They should make sure they know which drugs are being prescribed, and always double-check that the drugs received match the prescription.

Did you know?

It is believed that the Incas used anesthesia. Evidence supports the theory that shamans chewed cocoa leaves and drilled holes into the heads of patients (letting evil spirits escape), spitting into the wounds they made. The mixture of cocaine, saliva, and resin numbed the site enough to allow hours of drilling.

Did you know?

The most destructive flu epidemic of all times in recorded history occurred in 1918, with approximately 20 million deaths worldwide.

Did you know?

Nitroglycerin is used to alleviate various heart-related conditions, and it is also the chief component of dynamite (but mixed in a solid clay base to stabilize it).

a) Lunge with your legs open to the table. b) Avoid lunging with your legs close to table. a) Lunge with your legs open to the table. b) Avoid lunging with your legs close to table.
Some plastic intake manifolds are equipped with a pressure relief valve that would open in the ... Some plastic intake manifolds are equipped with a pressure relief valve that would open in the ...
Open palmar friction moving back and forth over the lumbar and thoracic regions. Open palmar friction moving back and forth over the lumbar and thoracic regions.
Afterload is the pressure that the ventricles must overcome in order to open the aortic and pulmonic Afterload is the pressure that the ventricles must overcome in order to open the aortic and pulmonic
A closed loop conductor that forms a circle with a radius of is located in a uniform but ... A closed loop conductor that forms a circle with a radius of is located in a uniform but ...
Comparison of open and closed circulatory systems. Comparison of open and closed circulatory systems.
Video: Arthroscopy

For a complete list of videos, visit our video library