Multiple Choice
A $100 million increase in government spending causes:
A) a larger change in equilibrium output in a closed economy than in an open economy.
B) an equal amount of change in equilibrium output in an open and a closed economy.
C) a larger change in equilibrium output in a closed economy than in an open economy if the marginal propensity to import is zero.
D) a larger change in equilibrium output in an open economy than in a closed economy.
Correct Answer:
Verified
Correct Answer:
Verified
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