If the Marginal Propensity to Consume Foreign Imports (MPC_F) Is

question 13

Multiple Choice

If the marginal propensity to consume foreign imports (MPC_F) is equal to 0.15, then a(n) :

• A) increase in domestic consumption will generate a 15% rise in imports.
• B) decrease in domestic consumption will generate a 15% rise in imports.
• C) increase in domestic income will generate a 15% rise in imports.
• D) decrease in domestic income will generate a 15% rise in imports.

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Definitions:

Equity Carve-out

A process where a company sells a portion of the equity of a subsidiary or division to outside investors, typically via an initial public offering.

Divestiture

The sale of assets, operations, divisions, and/or segments of a business to a third party.

Spin-off

A type of corporate reorganization in which a company creates a new independent company through the sale or distribution of new shares of its existing business.

Vertical Integration

An approach where a business grows by integrating various stages of its supply chain, including instances where a producer owns both its supplier and distributor.