Other Things Equal, in a Keynesian Income Model with a Foreign

question 5

Multiple Choice

Other things equal, in a Keynesian income model with a foreign sector, the autonomous spending multiplier that applies to an autonomous increase in the country's investment __________.

• A) is larger when "foreign repercussions" are included in the model than when such repercussions are not included in the model
• B) is of the same size when "foreign repercussions are included in the model as when such repercussions are not included in the model
• C) is smaller when "foreign repercussions" are included in the model than when such repercussions are not included in the model
• D) is larger than, is the same as, or is smaller when foreign repercussions are included in the model in comparison to when such repercussions are not included in the model - cannot be determined without more information

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Definitions:

External Equity

Refers to funds raised from outside the company, typically through issuing new shares to investors.

External Financing

Funds raised from outside the business, including bank loans, equity investments, and bond issues.

Dividend Payout

The portion of the company's earnings paid out to shareholders, usually in the form of dividends.

Sales Growth

This metric measures the increase in sales revenue over a specific period, indicating the business's ability to grow its operations and revenue.