An increase in income in an open economy nation will cause a change in consumer spending on home production, and a(n):
a. increase in taxes.
b. decrease in savings.
c. increase in foreign production.
d. increase in imports if MPCF (marginal propensity to consume foreign goods) is greater than zero.
Answer: d. increase in imports if MPCF (marginal propensity to consume foreign goods) is greater than zero.
Economics
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A. substitutes will normally be positive. B. complements will normally be positive. C. substitutes will normally be negative. D. complements will normally be infinite.
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If the Fed wishes to reduce the money supply, it can do all of the following except
A. Raise the discount rate. B. Sell securities on the open market. C. Buy shares of common stock in a large bank. D. Raise the minimum reserve ratio.
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