If the Marginal Propensity to Import Is 0

question 121

Multiple Choice

If the marginal propensity to import is 0.2, then a $1,000 increase in income will:

• A) decrease net exports by 2000.
• B) increase net exports by 200.
• C) decrease net exports by 200.
• D) increase net exports by 1000.

Analyze how elasticity affects total revenue.

Identify factors that influence demand elasticity.

Understand the relationship between demand elasticity and demand curve slope.

Evaluate the elasticity of demand in different price ranges.

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Definitions:

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