Explain how changes in the national income of Country A can lead to a repercussion effect of its trading partner, Country B, of its balance of payment. Illustrate and explain it with a numerical example with a foreign trade multiplier of 0.4.

Explain how changes in the national income of Country A can lead to a repercussion effect of its trading partner, Country B, of its balance of payment. Illustrate and explain it with a numerical example with a foreign trade multiplier of 0.4.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Explain how changes in the national income
of Country A can lead to a repercussion effect
of its trading partner, Country B, of its balance
of payment. Illustrate and explain it with a
numerical example with a foreign trade
multiplier of 0.4.

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