Assume the Domestic Economy Is an Open Economy

question 11

Multiple Choice

Assume the domestic economy is an open economy. Which of the following will make the government spending multiplier smaller?

• A) A move towards a more closed economy.
• B) An increase in the marginal propensity to consume.
• C) An increase in the marginal propensity to import.
• D) A decrease in the marginal propensity to import.
• E) A decrease in foreign output.

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Definitions:

Adequate Funding

Sufficient financial resources allocated to support a project, program, or initiative.

Politically Viable

Relates to ideas, policies, or actions that are acceptable within the prevailing political climate and likely to gain support or approval.

Professional Wisdom

Professional wisdom encompasses the deep knowledge, expertise, and ethical judgement that individuals in a profession accumulate over time, enhancing their ability to make sound decisions.

Primary Prevention

Strategies or interventions aimed at preventing the onset of diseases or injuries before they occur.