An Increase in the Marginal Propensity to Import Will Cause

question 19

Multiple Choice

An increase in the marginal propensity to import will cause

• A)the multiplier to increase and a given change in government spending (G)to have a larger effect on domestic output.
• B)the multiplier to increase and a given change in government spending (G)to have a smaller effect on domestic output.
• C)the multiplier to decrease and a given change in government spending (G)to have a larger effect on domestic output.
• D)the multiplier to decrease and a given change in government spending (G)to have a smaller effect on domestic output.

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Definitions:

Sale of Equipment

Sale of equipment refers to the process of selling off business assets, such as machinery or vehicles, which can impact a company's financial statements.

Cash Received

The total amount of cash collected by a business during a specific period, including all sources of income.

Operating Activities

Activities related to the core business functions of a company, including production, sales, and the delivery of services.

Cash Payments

Outflows of cash by a business or individual, often documented in financial transactions for goods, services, or debts.