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or, dY/dX=[1/(s/+ m/ )]
where s/= 1- c/
Graphical Explanation
I+X
S(Y)+M(Y)
I0+X1
Io+Xo
Yo Y1 Y
Graphical Explanation
Effect on National Income of Increase in Imports
I+X
(S+M)1
(S+M)0
Io+Xo
Y1 Yo Y
BOP Multiplier
dB/dX=[s//(s/+ m/)]
Under Normal Behavioural Assumption (when 0<s/<1and
0<m/<1) BOP multiplier also lie within 0 and 1
Or 0<[s//(s/+ m/)]<1
Id/+X Id/+X
Id+X/
Id+X
Id+X
Y0 Y1 Y Y Y1 Y2 Y