Which of the Following Will Occur in a Small Country

Multiple Choice

Which of the following will occur in a small country with a high marginal propensity to import?

A) Changes in government spending will cause large changes in output.
B) Changes in government spending will cause large changes in the trade balance.
C) A depreciation will cause only small changes in the trade balance.
D) There is no combination of policies that can eliminate the trade deficit.
E) all of the above