The actual multiplier effect in the us economy is less than


The actual multiplier effect in the U.S. economy is less than the multiplier effect in the text examples because:

the real-world MPS is larger than the MPS in the examples.

in addition to saving, households use some of any increase in income to buy imported goods and to pay additional taxes.

the gap between the nominal interest rate and the real interest rate widens as the economy expands or contracts.

the MPC in the United States is greater than 1.

Request for Solution File

Ask an Expert for Answer!!
Business Economics: The actual multiplier effect in the us economy is less than
Reference No:- TGS01041243

Expected delivery within 24 Hours