In a Closed Economy That Does Not Have International Trade

question 61

Multiple Choice

In a closed economy that does not have international trade, the spending multiplier equals _____.

• A)1/MPS
• B)1/MPC
• C)1/(MPC-1)
• D)1/(1-MPS)
• E)1/(1+MPS)

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Definitions:

Evaporation

The process by which water is transformed from a liquid to a gas or vapor state, often contributing to the hydrologic cycle by removing moisture from bodies of water, soil, and other surfaces.

Granite Bedrock

The solid rock layer under the soil composed primarily of granite, a coarse-grained igneous rock consisting mainly of quartz, mica, and feldspar.

Spheroidal Weathering

A form of mostly chemical weathering in which concentric or spherical shells of decayed rock are successively separated from a block of rock.

Rounded Shapes

Forms or outlines that are smooth and curved without sharp angles or edges, often formed by erosion or weathering processes in nature.