Scenario 10

question 57

Multiple Choice

Scenario 10.2?A hypothetical open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7. Assume that the economy is initially in equilibrium.
-Refer to Scenario 10.2. What is the spending multiplier of this economy?

• A) 2
• B) 1.4
• C) 0.7
• D) 0.9
• E) Cannot be determined with the given information

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Definitions:

Prejudice

A preconceived opinion or judgment about someone or something that is not based on reason or actual experience.

Acculturation

The process of adopting the cultural traits or social patterns of another group, often happening when different cultures come into direct contact.

Solomon Asch

A psychologist best known for his research on conformity, demonstrating how group pressure can persuade individuals to conform to an incorrect answer or viewpoint.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or societal standards.