The table below shows national income and imports.The level of exports is fixed at $300.All figures (in table and questions)are in millions of dollars.
TABLE 22-1
-Refer to Table 22-1.What is the marginal propensity to import?
A)0.01
B)0.10
C)1.0
D)10.0
E)not enough data to determine

Question

The table below shows national income and imports.The level of exports is fixed at $300.All figures (in table and questions)are in millions of dollars.
  TABLE 22-1
-Refer to Table 22-1.What is the marginal propensity to import?
A)0.01 
B)0.10 
C)1.0 
D)10.0 
E)not enough data to determine

Quizplus · Accepted Answer

The marginal propensity to import (MPI) is the increase in imports resulting from a $1 increase in national income. It is calculated by dividing the change in imports by the change in national income. In this case, imports increase by $100 (from $200 to $300) when national income increases by $1,000 (from $1,000 to $2,000). Therefore, the MPI is 0.1 ($100/$1,000).

The Table Below Shows National Income and Imports