Consider Two Economies,A and B

question 55

Multiple Choice

Consider two economies,A and B.Economy A has a marginal propensity to consume of 0.9,a net tax rate of 0.3 and a marginal propensity to import of 0.3.Economy B has a marginal propensity to consume of 0.9,a net tax rate of 0.1 and a marginal propensity to import of 0.3.Suppose there is an increase in autonomous investment of $5 billion in each of these economies.Which of the following statements is true?

• A)There is a larger decrease in real GDP in Economy B as a result of the change in autonomous investment.
• B)There is a larger decrease in real GDP in Economy A as a result of the change in autonomous investment.
• C)There is a larger increase in real GDP in Economy B as a result of the change in autonomous investment.
• D)There is a larger increase in real GDP in Economy A as a result of the change in autonomous investment.
• E)There is an equal effect on real GDP in Economies A and B as a result of the increase in autonomous investment.

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Definitions:

Cultural Dimension

A framework for understanding cultural differences in values, behaviors, and communication styles.

Community Inventory

A comprehensive collection of resources, strengths, needs, and characteristics within a community, often used for planning and development purposes.

Landmarks And Celebrations

Significant events, milestones, or locations that have a symbolic importance or are commemorated.

Levels Of Analysis

The different lenses through which one can examine or analyze a phenomenon, often ranging from individual to organizational, to societal or international levels.