Economics · Macroeconomics
Match the multiplier formula with the correct economic context: (P) Balanced Budget Multiplier in 3-sector closed economy (Q) Government Expenditure Multiplier (R) Tax Multiplier (S) Foreign Trade Multiplier (4-sector)
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1P → 1; Q → 1/(1−MPC); R → −MPC/(1−MPC); S → 1/(1−MPC+MPM)✓
- 2P → 1/(1−MPC); Q → 1; R → MPC/(1−MPC); S → 1/(MPS+MPM)
- 3P → 0; Q → MPC/(1−MPC); R → −1/(1−MPC); S → 1/(1−MPC)
- 4P → 1; Q → −MPC/(1−MPC); R → 1/(1−MPC); S → 1/MPS
Correct answer
P → 1; Q → 1/(1−MPC); R → −MPC/(1−MPC); S → 1/(1−MPC+MPM)
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