Author Question: If a country's imports are very important in determining the volume of exports from its trading ... (Read 39 times)

mydiamond · **on:** Jun 30, 2018

If a country's imports are very important in determining the volume of exports from its trading partners, then:
a. the simple spending multiplier understates the true value of the multiplier.
b. the spending multiplier will be equal to 1/marginal propensity to import.
c. the simple spending multiplier is an accurate measure of the multiplier effect.
d. the simple spending multiplier will be equal to 1/MPC
e. the spending multiplier will be equal to 1/marginal propensity to save.

Question 2

The law of demand refers to the:
a. negative relationship between the price of a good and the willingness of producers to sell it.
b. price increase that results from an increase in demand.
c. inverse relationship between the price of a good and the quantity demanded.
d. increase in the quantity of a good made available when its price increases.