In an Open economy leakage to imports ____________ the value of the multiplier ?

Related Mcqs:

1. What is called the difference in the value of a nation’s imports over exports or exports over imports ?

   A. Trade deficit
   B. Trade simples
   C. Both a & b
   D. Not a nor b

2. When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists ?

   A. trade creation
   B. trade diversion
   C. dynamic welfare effects
   D. comprehensive welfare effects

3. A depreciation of the dollar will have its most pronounced impact on imports if the demand for imports is ?

   A. constant
   B. inelastic
   C. elastic
   D. Unitary elastic

4. The total multiplier for the economy will reflect ?

   A. MPC and MPT
   B. MPT and MPZ
   C. MPC and MPZ
   D. MPC, MPT and MPZ

5. If the banks in an economy operate with a reserve ratio of 20 percent then the money multiplier is ?

   A. 4
   B. 20
   C. 25
   D. 5

6. To aid its calculator producers, suppose that the government provides them a subsidy of $10 for each calculator produced The amount of imports now equals _____ and the deadweight loss of the subsidy to the Canadian economy equals _________?

   A. 20 calculator, $50
   B. 20 calculator, $100
   C. 25 calculator, $50
   D. 25 calculator, $100

7. If the marginal propensity of consume MPC is 0.75 the value of the multiplier is ?

   A. 4
   B. 7.5
   C. 5
   D. 0.75

8. What is more likely to be found in a free market economy than in a planned economy ?

   A. an even distribution of income
   B. an incentive to innovate
   C. a wide range of public goods
   D. full employment of labor

9. Refer to Exhibit 6. Suppose the economy is Operating in long-run equilibrium at point E. In the long run a monetary contraction will move the economy in the direction of point ?

   A. F
   B. a
   C. H
   D. I

10. The market power effect of an international joint venture can lead to welfare losses for the domestic economy unless offset by cost reductions. Which type of cost reduction would not lead to offsetting welfare gains for the overall economy ?

    A. R&D generating welfare improved technology
    B. development of more productive machinery
    C. new work rules promoting workers efficiency
    D. lower wages extracted from workers