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.In this economy,if actual national income increases by $600,the level of imports will
A)rise by $30.
B)rise by $60.
C)rise by $100.
D)fall by $100.
E)not change.

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.In this economy,if actual national income increases by $600,the level of imports will
A)rise by $30. 
B)rise by $60. 
C)rise by $100. 
D)fall by $100. 
E)not change.

Quizplus · Accepted Answer

The level of imports typically increases with national income. If the marginal propensity to import is 0.1, then a $600 increase in national income would lead to a $60 increase in imports (0.1 * $600 = $60).

The Table Below Shows National Income and Imports