Scenario 10.1 Imagine an Economy That Does Not Have International Trade and Trade

question 48

Multiple Choice

Scenario 10.1
Imagine an economy that does not have international trade and is initially in equilibrium. Later the government increases the level of spending by $350 million because it received a gift from abroad. In this economy, only 65 cents of every dollar is spent, and the rest is saved.
-Refer to Scenario 10.1. Calculate the value of the spending multiplier for this economy.

• A) 2.86
• B) 0.286
• C) 1.54
• D) 0.154
• E) 0.35

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Definitions:

Electro-magnetic Induction

Electro-magnetic induction is the process whereby a changing magnetic field within a coil of wire induces a voltage across the ends of the wire, leading to the creation of an electric current.

Domination

Is a mode of interaction in which nearly all power is concentrated in the hands of people of similar status. Fear is the dominant emotion in systems of interaction based on domination.

Course Materials

Educational resources provided for the purpose of learning and study, including textbooks, online resources, lecture notes, and multimedia contents.

Total Institutions

Places where individuals are cut off from the wider community and have their lives controlled and regulated by the administrative staff.