Which of the Following Statements Is True

question 124

Multiple Choice

Which of the following statements is true?

• A) The larger a nation's marginal propensity to consume, the smaller the open-economy multiplier.
• B) The smaller a nation's marginal propensity to import, the smaller the open-economy multiplier.
• C) The larger a nation's marginal propensity to export, the smaller the open-economy multiplier.
• D) The larger a nation's marginal propensity to import, the smaller the open-economy multiplier.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to fund day-to-day operations.

Company

An organized entity formed for the purpose of conducting business, wherein it can earn revenues, incur expenses, and operate with the aim of profit.

Inventory Turnover

A metric indicating the frequency at which a company's stock is sold and replenished within a specific timeframe.

Inventory Turnover

An indicator revealing the number of times a company's inventory is turned over and restocked during a specific period, demonstrating how efficiently inventory is handled.