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Refer to the information provided in Figure 20.1 below to answer the questions that follow. FAE - C.I.G AE-CIG . EX : IM 25 Butput Figure 20.1 11) Refer to Figure 19.1. The open economy multiplier is A) 1.25. B) 2. C) 4. D) 8. 12) Refer to Figure 20.1. What is the MPM in this economy? A) 0.2 B) 0.25 C) 0.6 D) cannot be determined from the graph 13) The open economy multiplier will increase if A) the MPC decreases. B) the MPM decreases. C) either the MPM or the MPC decreases. D) the MPM increases. 14) A $100 million increase in government spending causes A) an equal amount of change in equilibrium output in an open and a closed economy. B) a larger change in an open economy than in a closed economy. C) a larger change in a closed economy than in an open economy. D) a larger change in a closed economy than in an open economy if the MPM is zero. 15) During the recession of 2008-2009, the trade feedback effect was evident between developed economies as economic in one country led to worldwide economic which in turn led to in the first country A) decline; growth; growth B) decline; decline; further decline C) growth; growth; further growth D) growth: decline; growth 16) Suppose that an increase in the price level of one country drives up prices in other countries. This, in turn, increases the price level in the first country. This process is the A) J-curve effect. B) trade feedback effect. C) price feedback effect. D) balance of trade effect. 17) Suppose that the price of a plasma TV is $1,200 in the United States and 13,200 pesos in Mexico. If the current exchange rate is 10 pesos to the dollar, then purchasing power parity theory would predict that in the long run A) their will be no change in the exchange rate B) the exchange value of the peso will depreciate. C) the exchange value of the peso will appreciate. D) the exchange value of the dollar will depreciate