Which of the following statements is true?

[Mollykgkg]

Question 1

A $100 million increase in government spending causes

◦ an equal amount of change in equilibrium output in an open and a closed economy.
◦ a larger change in an open economy than in a closed economy.
◦ a larger change in a closed economy than in an open economy.
◦ a larger change in a closed economy than in an open economy if the 
MPM is zero.

Question 2

Which of the following statements is 
true?

◦ The larger a nation's marginal propensity to consume, the smaller the open-economy multiplier.
◦ The smaller a nation's marginal propensity to import, the smaller the open-economy multiplier.
◦ The larger a nation's marginal propensity to export, the smaller the open-economy multiplier.
◦ The larger a nation's marginal propensity to import, the smaller the open-economy multiplier.

[nekcihc358]

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Only 39% of students answer this correctly

[Mollykgkg]

Thanks for the timely response, appreciate it

[meganmoser117]

YES! Correct, THANKS for helping me on my review