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In a Keynesian Model, If MPM = 0

question 26

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In a Keynesian model, if MPM = 0.2, MPC = 0.8, and there is no government sector, what will be the ultimate effect of an autonomous increase in investment of 30 on the imports of the country, other things equal?


Definitions:

Outcomes Allocated

The distribution or assignment of results or benefits from a process or activity to different stakeholders or participants.

Fairness

The quality of making judgments that are impartial and free from discrimination, allowing equal treatment for all.

Power Distance

A cultural dimension that describes the extent to which individuals in a society accept or expect power inequalities between people.

Authority

The right to influence another person.

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