In the Context of Technological Advancements,outsourcing,and Offshoring,identify a Way in Which

question 50

Multiple Choice

In the context of technological advancements,outsourcing,and offshoring,identify a way in which the new technological environment impacts multinational corporations and societies as a whole.

• A) A decline in the cost of doing business worldwide
• B) Price rise due to cost of equipment
• C) Elimination of higher-priced labor
• D) Replacement of employees by machines

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Definitions:

Autonomous Investment

Investment in an economy that does not depend on the current level of income or production, often driven by innovation or governmental policy.

Aggregate Expenditure

The total amount of spending in the economy that includes consumption, investment, government purchases, and net exports.

Simple Spending Multiplier

The ratio of a change in real GDP demanded to the initial change in spending that brought it about; the numerical value of the simple spending multiplier is 1/(1 + MPC); called “simple” because only consumption varies with income.

Marginal Propensity

Describes the portion of additional income that an individual is willing to spend on consumption rather than saving.