When Government Spending or Investment Increases in an Open Economy

Multiple Choice

When government spending or investment increases in an open economy

A) some of the extra consumption spending that results is on foreign products and not on domestically produced goods and services.
B) none of the extra consumption spending that results is on foreign products; all of it is on domestically produced goods and services.
C) consumption rises but income does not.
D) all of the extra consumption spending that results is on foreign products and none of it on domestically produced goods and services.