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      Question

      What is the investment multiplier when the marginal

      propensity to consume is 0.60 and the marginal propensity to import is 0.10?
      A 2 Correct Answer Incorrect Answer
      B 3 Correct Answer Incorrect Answer
      C 4 Correct Answer Incorrect Answer
      D 5 Correct Answer Incorrect Answer
      E 6 Correct Answer Incorrect Answer

      Solution

      Multiplier = 1/(1-c+m) = 1/(1-0.6+0.1) = 2.

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