The Effect of a Sustained Increase in Government Spending or Investment

question 140

True/False

The effect of a sustained increase in government spending or investment on aggregate output is larger in an open economy than in a closed economy.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, offering limited liability to its shareholders, and having the ability to own assets, sue, and be sued.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Service-Type Businesses

Companies that offer non-tangible products or services to customers rather than physical goods.

Legal Entity

An organization or individual that has legal rights and obligations, including the ability to enter into contracts, sue, and be sued.