The marginal propensity to import is larger in Mexico than in the United States. As a result,
A) there is less autonomous investment in Mexico.
B) the expenditure multiplier is larger in Mexico.
C) the expenditure multiplier is larger in the United States.
D) induced expenditure is larger in Mexico.
E) there is more autonomous expenditure in Mexico.
C
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When prices and unemployment rise, such an event is sometimes called
a) expansion. b) stagflation. c) inflation. d) depreciation.
The relationship between the quantity of real balances demanded and the rate of interest (called the demand for money curve) will ____ when GDP increases because _____.
A) increase (shift right); more transactions balances are needed to make purchases and to hold between pay periods B) increase (shift right); more asset balances are needed for saving or precautionary reasons C) decrease (shift left); fewer transactions balances are needed to make purchases and to hold between pay periods D) decrease (shift left); lower asset balances are needed for saving or precautionary reasons