Assume That the Multiplier Effect for Mexico Is 0

question 38

Multiple Choice

Assume that the multiplier effect for Mexico is 0.85 for an increase in spending by the U.S. government by $1. Therefore, a $20 billion decrease in spending by the U.S. government results in:

• A) a $23.5 billion increase in Mexican real GDP.
• B) a $133.3 billion decrease in Mexican real GDP.
• C) a $3 billion decrease in Mexican real GDP.
• D) a $17 billion decrease in Mexican real GDP.
• E) a $23.5 billion decrease in Mexican real GDP.

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Definitions:

Eugene Debs

was an American socialist, political activist, trade unionist, and one of the founding members of the Industrial Workers of the World, as well as a five-time Socialist Party of America presidential candidate.

Nationalize

The process by which a government takes ownership and control of a private industry or assets, typically for the purpose of redistributing wealth and maintaining essential services.

Conservation Movement

A progressive reform movement focused on the preservation andsustainable management of the nation’s natural resources.

Progressive Thrust

An impetus or drive towards reform and improvements in societal, political, or economic issues aiming for progress.