Which of the Following Will Occur in a Small Country

question 78

Multiple Choice

Which of the following will occur in a small country with a high marginal propensity to import?

• A)changes in government spending will cause large changes in output.
• B)changes in government spending will cause large changes in the trade balance.
• C)a depreciation will cause only small changes in the trade balance.
• D)there is no combination of policies that can eliminate the trade deficit.
• E)all of the above

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Definitions:

Market

A place or arrangement through which buyers and sellers engage in exchange of goods and services.

Potential Interactions

This refers to the possible ways in which different factors or agents in an economic, social, or ecological system can affect each other.

Actual Interactions

The real and observable exchanges or engagements between entities, often studied in various fields including sociology, economics, and behavioral science.

Potential Interactions

Possible engagements or relationships between entities or variables in a given context, which could affect outcomes.