If the required reserve ratio, m, is 20 percent, then the oversimplified money multiplier is

President Salinas of Mexico devised a strategy to restore Mexican growth by encouraging

A) large inflows of foreign capital. B) large increases in domestic savings. C) large interest rate cuts. D) an expansion of import substitution industrialization policies. E) more government ownership of industrial firms.

If the marginal propensity to consume is 0.6, what is the value of the expenditure multiplier?

a. 1.0 b. 1.6 c. 2.0 d. 2.5 e. 6.0