Consider Two Economies, Each with a Marginal Propensity to Consume

question 84

Multiple Choice

Consider two economies, each with a marginal propensity to consume of 0.8 and a net tax rate of 0.2. One economy is closed to international trade; the second is open to international trade with a marginal propensity to import of 0.3. Suppose there is an increase in autonomous spending of $5 billion in each of these economies. Which of the following statements is true?

• A)The AD curve shifts to the right by more in the closed economy than in the open economy.
• B)The simple multiplier is larger in the open economy than in the closed economy.
• C)The AD curve shifts to the right by more in the open economy than in the closed economy.
• D)The AD curve shifts to the right by the same amount in both economies.
• E)The AD curve shifts to the left by the same amount in both economies.

Recognize the significance of reports in documenting periodic activities or specific events.

Understand the functions and uses of Word's MAILINGS tab for document preparation.

Identify and use keyboard shortcuts for navigation and formatting within Word documents.

Comprehend the structure and styles of business letters.

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Definitions:

Report

A structured account or document detailing the findings or results of a specific investigation, study, or analysis.

Confuse Readers

To present information in a way that makes it difficult for the audience to understand or follow the intended message.

Interview

A formal conversation between two or more people where questions are asked by the interviewer to obtain information from the interviewee.

Closed-Ended Questions

Questions formulated in a way that limits responses to specific choices, such as "yes" or "no," making them easy to analyze.