If a Country's Imports Are Very Important in Determining the Volume

question 91

Multiple Choice

If a country's imports are very important in determining the volume of exports from its trading partners, then:

• A)the simple spending multiplier understates the true value of the multiplier.
• B)the spending multiplier will equal 1/marginal propensity to import.
• C)the simple spending multiplier is an accurate measure of the multiplier effect.
• D)the simple spending multiplier will equal 1/MPC
• E)the spending multiplier will equal 1/marginal propensity to save.

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Definitions:

Efficiency-Enhancing Innovation

Innovations that improve the productivity and performance of enterprises, often leading to reduced costs and increased quality.

Strategic Alliance

A cooperative agreement between businesses or organizations aimed at achieving common goals or completing specific projects.

Geographical Proximity

The measure of how close or far apart entities are located from one another in physical space.

Leather Industry

Refers to the various businesses involved in the production, processing, and selling of leather and leather products.