An MPI of 0.4 indicates that for every 100 percent increase in domestic income:
A) there is a 40 percent increase in investment.
B) there is a $40 increase in investment.
C) there is a 40 percent decline in imports.
D) there is a $40 increase in imports.
E) there is a 40 percent increase in imports.

Question

Quizplus · Accepted Answer

An MPI (Marginal Propensity to Import) of 0.4 means that for every 100 percent increase in domestic income, imports increase by 40 percent.