Suppose the marginal propensity to import for country A is 0.4.Calculate the change in total value of imports of the country if national income increases by $100, 000.
A)$16, 000
B)$20, 000
C)$60, 000
D)$40, 000
E)$25, 000

Question

Quizplus · Accepted Answer

The change in total value of imports would be equal to the marginal propensity to import multiplied by the increase in national income. 
Therefore, the change in total value of imports would be: 
0.4 x $100,000 = $40,000 
Thus, the correct answer is (D) $40,000.

Suppose the Marginal Propensity to Import for Country a Is