An Increase in the Marginal Propensity to Import Will Cause

question 18

Multiple Choice

An increase in the marginal propensity to import will cause:

• A) the ZZ line to become flatter and a given change in government spending to have a larger effect on domestic output.
• B) the ZZ line to become flatter and a given change in government spending to have a smaller effect on domestic output.
• C) the ZZ line to become steeper and a given change in government spending to have a larger effect on domestic output.
• D) the ZZ line to become steeper and a given change in government spending to have a smaller effect on domestic output.
• E) the ZZ line to become flatter and a given change in government spending to have no effect on domestic output.