The increase in imports induced by a dollar increase in income is called the ________________.
A)import elasticity of demand
B)marginal propensity to import
C)income elasticity of imports
D)none of the above

Question

Quizplus · Accepted Answer

The marginal propensity to import (MPI) measures the proportion of additional income that is spent on imports. It quantifies the increase in imports caused by an increase in income, making it the correct term for the increase in imports induced by a dollar increase in income.

The Increase in Imports Induced by a Dollar Increase in Income