Is there a multiplier effect from increases and decreases in net exports?

What will be an ideal response?


Yes, there is a multiplier effect from changes in net exports. Changes in the net export schedule cause shifts in the aggregate expenditure curve.
There is a multiplier effect due to the marginal propensity to consume. An increase in exports is an increase in spending that gets multiplied down the line as spending is recycled and consumption increased. This causes the multiplied effect on GDP.

Economics

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What will be an ideal response?

Economics