As overseas leakage becomes greater, the multiplier effect
A. shrinks.
B. grows.
C. becomes more moderate.
D. is replaced with the incentive effect.
Answer: A
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One reason a country might choose a flexible exchange rate
A) to reduce inflation and promote a stable economic environment. B) to reduce the impact of economic shocks. C) to rid themselves of the pressure of monetary management. D) that it is easier for all citizens to understand.
For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese. Germany can produce one watch for every 100 pounds of cheese it produces. Which of the following is true with regard to opportunity costs in the two countries?
a. The opportunity cost of producing watches is higher in Denmark. b. The opportunity cost of producing cheese is higher in Denmark. c. The opportunity cost of producing cheese is identical in both countries. d. It is impossible to compare opportunity costs because the two countries use different currencies. e. In both countries combined, the opportunity cost of one watch is 150 pounds of cheese.
Marginal cost is equal to
a. TC/Q. b. ?ATC/Q. c. ?TC/?Q. d. ?Q/?TC.
Bonds issued by state and local governments are called _____ bonds. Bonds issued by financially shaky corporations are called _____ bonds. Of these two, which type of bond usually pays a relatively higher interest rate?
Fill in the blank(s) with correct word