If the Marginal Propensity to Save (MPS)is 0

question 117

Multiple Choice

If the marginal propensity to save (MPS) is 0.5 and net exports falls by $100 million, then

• A)real Gross Domestic Product (GDP)will increase by $100 million.
• B)real Gross Domestic Product (GDP)will fall by $200 million.
• C)real Gross Domestic Product (GDP)will not change.
• D)the effect on real Gross Domestic Product (GDP)cannot be determined from the given information.

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Definitions:

Developed Nations

Countries characterized by high levels of economic development, advanced technological infrastructure, and high standards of living.

Child Labor

The employment of children in various industries or businesses, often in conditions that are exploitative or harmful to their development.

Poor Countries

Nations characterized by low levels of economic development, limited resources, and often high rates of poverty and insufficient access to basic needs such as education and health care.

Social Change

The transformation over time of the institutions, culture, and norms within a society, often driven by collective behavior and social movements.