The Marginal Propensity to Import (MPM) tells us:

(a) That society needs to import.
(b) The proportion of each extra Euro of income that is spent on imports.
(c) That the total volume of imports is constant over time.
(d) The proportion of any extra income that will be spent on exports.


Answer: (b) The proportion of each extra Euro of income that is spent on imports.

Economics

You might also like to view...

Currency held by the nonbanking public is a medium of exchange

a. True b. False Indicate whether the statement is true or false

Economics

Explain how exchange rate changes affect aggregate demand.

What will be an ideal response?

Economics

Given: Sales of $10 million; implicit costs of $2 million; and explicit costs of $5 million. Find (a) accounting profit; (b) economic profit.

What will be an ideal response?

Economics

The production given up of the one item is the

What will be an ideal response?

Economics