In Country A, the marginal propensity to consume is ½, and in Country B, it is ¾. What does this tell us about the multipliers for these countries?
a. Country A has a larger multiplier than Country B.
b. Country B has a larger multiplier than Country A.
c. Both countries have the same multiplier.
d. Country B will start with a larger multiplier and end with a smaller one.
b. Country B has a larger multiplier than Country A.
You might also like to view...
The government in the country of Zappoo is trying to decide which tax plan to implement. The table above shows three alternative plans. If the government decides to implement a progressive income tax, it will implement tax plan ________
A) A B) B C) C D) A or B
A nation's comparative advantage is determined by
A. the total cost of production. B. the quantity of resources required to produce a unit of output. C. the opportunity cost of producing an item relative to a trading partner's opportunity cost of producing the same item. D. specialization in the production of all goods.
If the economy is on the steep part of its aggregate supply curve, expansionary policy will mostly increase the price level.
Answer the following statement true (T) or false (F)
By the mid-1980s, the United States
A. changed from a creditor nation to a debtor nation. B. was neither a creditor nation or a debtor nation, as its current account and capital account were both valued at zero. C. was both a creditor nation and a debtor nation, as its balance of payments was equal to zero. D. changed from a debtor nation to a creditor nation.