Author Question: If German imports of French products are very important in determining the volume of German exports ... (Read 152 times)

geoffrey · **on:** Jun 30, 2018

If German imports of French products are very important in determining the volume of German exports to France, we would expect the actual German spending multiplier to be larger than 1/(marginal propensity to save + marginal propensity to import).
a. True
b. False
Indicate whether the statement is true or false

Question 2

Assuming that Chinese food and Thai food are substitutes, if P. F. Chang's Chinese Restaurant reduces its prices:
a. the sales of the nearby Bahn Thai restaurant will increase.
b. demand for meals at P. F. Chang's will increase.
c. the demand for meals at the Bahn Thai restaurant will decrease.
d. the quantity of food demanded from P. F. Chang's will decrease.