For a Small Country with Closed Economy, If the Marginal

question 32

True/False

For a small country with closed economy, if the marginal propensity to save is equal to 0.2, then the spending multiplier indicates that a $10 exogenous increase in government spending will lead to a $20 increase in GDP.

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Definitions:

Standard Deviation

A statistical measurement that quantifies the dispersion or spread of a set of data points around their mean.

Normal Probability Distribution

A bell-shaped curve distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence.

Discrete Probability Distributions

Probability distributions that deal with variables that have distinct, separate values.

Normally Distributed

A type of continuous probability distribution for a real-valued random variable where the data are symmetrically distributed around the mean, forming a bell-shaped curve.