Question:

If MPW = 0.1, and if exports increase by 100, then?

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A. output will increase by 10

B. output will increase by 100

C. output will increase by 1000

D. do not have enough data to calculate what will happen to output

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  1. C. output will increase by 1000

    For marginal propensity to withdraw case complex multiplier  will be 1/MPW=1/0.1=10

    So 100*10=1'000

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