Use the figure below to answer the following questions.
Figure 11.2.3
There are no taxes in this economy.
-In Figure 11.2.3, if there are no income taxes, the marginal propensity to import is
A)0.3.
B)0.6.
C)0.25.
D)0.
E)0.1.

Question

Use the figure below to answer the following questions.
  Figure 11.2.3
There are no taxes in this economy.
-In Figure 11.2.3, if there are no income taxes, the marginal propensity to import is
A)0.3. 
B)0.6. 
C)0.25. 
D)0. 
E)0.1.

Quizplus · Accepted Answer

The marginal propensity to import (MPM) is the fraction of an increase in income that is spent on imports. Without seeing Figure 11.2.3, we can't determine the exact value, but if A) 0.3 is the correct answer, it means that for every additional dollar of income, 30 cents are spent on imports.

Use the Figure Below to Answer the Following Questions