Economics · Open Economy Macroeconomics
In an open economy, a shift in expenditure towards more imports will lead to:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1a decrease in overall expenditure but with an improvement in income.
- 2a decrease in income and a decline in balance of payments.✓
- 3a decrease in savings and an improvement in income.
- 4an increase in overall expenditure and a worsening of balance of payments.
Correct answer
a decrease in income and a decline in balance of payments.
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