The following data refers to a national economy with all figures in $billions.

-Refer to the table above to answer this question.What is the value of the MPE?
A)0.1
B)0.4
C)0.5
D)0.6

Question

The following data refers to a national economy with all figures in $billions.
 
-Refer to the table above to answer this question.What is the value of the MPE?
A)0.1 
B)0.4 
C)0.5 
D)0.6

Quizplus · Accepted Answer

MPE (Marginal Propensity to Export) is calculated as change in exports divided by change in income. From the table, we see that when income increases from $1000 billion to $2000 billion, exports increase from $500 billion to $1000 billion. Therefore, change in exports is $500 billion and change in income is $1000 billion. MPE = 500/1000 = 0.5. Therefore, the answer is C.

The Following Data Refers to a National Economy with All