If a Country's Imports Are Very Important in Determining the Volume

question 91

Multiple Choice

If a country's imports are very important in determining the volume of exports from its trading partners, then:

• A)the simple spending multiplier understates the true value of the multiplier.
• B)the spending multiplier will equal 1/marginal propensity to import.
• C)the simple spending multiplier is an accurate measure of the multiplier effect.
• D)the simple spending multiplier will equal 1/MPC
• E)the spending multiplier will equal 1/marginal propensity to save.

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Definitions:

Pure Monopolist

A market participant that is the sole supplier of a unique product without close substitutes, possessing significant control over market prices.

Total Revenue

The total income earned by a firm from selling its products or services.

Demand Schedule

A presentation showing the level of demand from buyers for a product or service, matched to their willingness and ability to pay at various price scales.

Socially Optimal

Refers to the most efficient allocation of resources from society's point of view, where social welfare is maximized.