Why are savings, taxes, and imports referred to as leakages in calculating the multiplier effect?

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Why are savings, taxes, and imports referred to as “leakages” in calculating the multiplier effect?

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Principles Of Economics

ISBN: 9781506699868

2nd Edition

Authors: OpenStax

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Question Posted: Nov 01, 2023 01:47 AM

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Why are savings, taxes, and imports referred to as leakages in calculating the multiplier effect?

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In economics the multiplier effect refers to the phenomenon where an initial change in spending leads to a larger and more significant change in overa...View the full answer

Principles Of Economics

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