The Multiplier Effect of a Change in Foreign Autonomous Expenditures

question 100

Multiple Choice

The multiplier effect of a change in foreign autonomous expenditures in the U.S.:

• A)is zero because the U.S.is a closed economy.
• B)is large because the United States imports a significant amount of foreign goods and services.
• C)is large because the United States exports domestic products to every part of the world.
• D)is small because the U.S.economy is too large to be significantly affected by foreign aggregate expenditures.
• E)is small because U.S.foreign trade is not large enough to be counted as part of domestic GDP.

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Definitions:

Convention of 1818

was an agreement between the U.S. and Britain that set the 49th parallel as the boundary between British North America and the United States, from the Lake of the Woods to the Rocky Mountains.

U.S./Canadian Border

The international boundary between the United States and Canada, stretching across North America and recognized as the world's longest undefended border.

American Merchants

Individuals from the United States engaged in domestic and international trade, playing a crucial role in the economic development and expansion of America, especially from the colonial period through the 19th century.

Trade With China

The commercial exchanges between China and other countries, encompassing goods, services, technology, and cultural products, pivotal for global economic dynamics.