Consider an Open Economy That Has a Marginal Propensity to Import

question 64

Multiple Choice

Consider an open economy that has a marginal propensity to import equal to 0.30.If national income rises by $2500,imports will rise by

• A)$30.
• B)$300.
• C)$750.
• D)$7500.
• E)$8333.

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Definitions:

Corporate Form

A business structure where owners have limited liability, and the entity is recognized legally as separate from its owners.

Limited Liability

A legal structure for businesses that limits the personal financial responsibility of the owners for the company's debts and obligations.

Externalities

Financial repercussions impacting parties who are not directly involved, which may manifest as either beneficial or detrimental outcomes.

Sole Proprietorship

A business owned and operated by one person, where there is no legal distinction between the owner and the business entity.