Principles of Macroeconomics Study Set 7
A Decrease in the Interest Rate Will Cause an Increase
A decrease in the interest rate will cause an increase in investment spending.
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The value of the multiplier is equal to the inverse of the marginal leakage rate.
Growth in an economy's GDP (if not caused by a change in exports)results in a larger trade deficit or in a reduction of a previous trade surplus.
If taxes increase,disposable income will fall but consumption will remain the same.
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