If an Economy's MPC Is 0

question 16

Multiple Choice

If an economy's MPC is 0.7, then an increase in government spending of $2000 will increase by:

• A) $2857
• B) $6667
• C) $3000
• D) $7000

Comprehend the effect of foreign investments and tourism on currency values.

Know the differences between fixed and flexible exchange rate systems and their advantages and disadvantages.

Understand policy tools available to governments to maintain fixed exchange rates.

Recognize the role of international trade in determining exchange rates.

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Definitions:

Attracted

To feel drawn towards a person, object, or activity due to its appealing qualities or characteristics.

Female

Pertaining to the sex that typically produces eggs (ova) and possesses characteristics, such as specific reproductive organs and chromosomes, that are biologically associated with bearing offspring.

Deviance-free

A theoretical state or condition where there is an absence of behavior that violates the normative rules, expectations, or laws of a society.

Societies

Groups of individuals who share a common culture, institutions, and collective activities, often living together in communities or nations.