Suppose That Japan Is a Nation of Savers with a Marginal

question 22

Multiple Choice

Suppose that Japan is a nation of savers with a marginal propensity to consume of 0.6 and that the United States is a nation of spenders with a marginal propensity to consume of 0.9.Which of the following statements is correct?

• A) A small increase in spending will have a more powerful effect in starting a recovery in the United States than in Japan.
• B) The Japanese economy is not in equilibrium.
• C) The Japanese economy is more susceptible to a recession caused by a drop in spending.
• D) The U.S.economy tends to overheat from too much spending.

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Definitions:

Devil's Advocate

Person who defends a less popular viewpoint so that it receives fuller consideration.

Evaluating

Measuring something, such as a document draft or a group decision, against your goals and the requirements of the situation and audience.

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The functions or parts played by individuals or entities in a particular situation or context.

Leader

An individual who guides or directs a group towards achieving a common goal, often inspiring and motivating others.