Foreign Repercussions of Changes in Domestic Spending May Cause

question 116

Multiple Choice

Foreign repercussions of changes in domestic spending may cause:

• A)the GDP gap to be larger than the recessionary gap.
• B)the equilibrium income to increase by an amount equal to the change in net exports.
• C)the actual spending multiplier to be larger than the reciprocal of the marginal propensity to save plus the marginal propensity to import.
• D)equilibrium income to rise by a smaller amount than evidenced by the multiplier effect of autonomous spending increases.
• E)real GDP to be larger than potential GDP.

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Definitions:

Chemoreceptors

Sensory receptors in the body that respond to chemical stimuli, such as taste or smell.

Middle Ear

The air-filled central cavity of the ear, behind the eardrum, containing the three smallest bones in the body that are involved in the transmission of sound vibrations.

Stapes

The smallest bone in the human body, located in the middle ear, playing a critical role in the conduction of sound vibrations to the inner ear.

Oval Window

A membrane-covered opening that leads from the middle ear to the inner ear, playing a key role in the mechanics of hearing.