An Increase in Australia's Marginal Propensity to Import Will

question 15

Multiple Choice

An increase in Australia's marginal propensity to import will:

• A)have no effect on GDP, because GDP only includes spending in Australia
• B)cause an increase in GDP, because Australians have risen their spending
• C)cause a decrease in GDP, because some existing spending will demand production overseas instead of in Australia
• D)always be bad for the economy

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Definitions:

Function

The specific role or activity for which something is used or responsible within a system, organism, or machine.

Gross Profit Margin

Gross profit margin is a financial metric expressed as a percentage that measures the financial health of a company by indicating the proportion of money left over from revenues after accounting for the cost of goods sold (COGS).

Sales

The transactions in which goods or services are transferred from seller to buyer for money or other compensation.

Cost of Goods Sold

Costs directly linked to the creation of products sold by a firm, such as the expenses for materials and workforce.