The ratio of the resulting increase in domestic product to an addition to exports. This is a class of formula rather than any one specific formula. In the simplest possible economy with only one form of leakage, say a savings propensity s, the foreign trade multipier (FTM) is 1/(1 - s). In a more realistic economy, with leakages of t tax payments out of each 1 of income, s savings out of each 1 of disposable income, and m imports out of each 1 of spending, 1 of exports generates (1 - t) of disposable income, (1 - s)(1 - t) of spending, and (1 - m)(1 - s)(1 - t) of extra domestic incomes. The FTM is thus 1/[1 - (1 - m)(1 - s)(1 - t)]. A truly realistic model which distinguished between direct and indirect taxes and between imports of intermediate inputs to production and final goods would produce a more complex FTM formula.

• long-term unemployment
• Lorenz curve
• loss
• loss leader
• Louvre Accord
• loyalty, brand
• Ltd
• Lucas critique
• lumpiness
• lump of labour
• lump-sum tax
• luxury
• M0
• M1
• M2
• M3, M4, and M5
• M3, sterling
• Maastricht convergence criteria
• Maastricht, Treaty of
• macroeconomics
• maintenance
• majority shareholder
• maker, market-
• Malthusian problem
• managed currency