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Chapter 8: Problem 4

Since the early 1990 s our trade deficit has \(\rightarrow(1.03)\) a) fallen substantially c) risen slightly b) fallen slightly d) risen substantially

Short Answer

Expert verified
Since the multiplier is \(1.03\), which is greater than 1 but close to it, the trade deficit has increased by a small magnitude. Thus, the correct answer is c) risen slightly.

Step by step solution

01

Identify the change in the trade deficit from the multiplier

The multiplier is given as \(\rightarrow1.03\). Since the value is greater than 1, it indicates an increase in the trade deficit.
02

Determine the magnitude of the change

The multiplier is close to 1, so the increase in the trade deficit is minimal. Thus, the magnitude of the change is small.
03

Choose the appropriate answer

Given the information above, we can conclude that the trade deficit has risen slightly. Therefore, the correct answer is: c) risen slightly

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Most popular questions from this chapter

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