In a closed economy marginal propensity to consume .6. if, Ask an Expert

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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.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9295293

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