If an Economy's Real GDP Increases from $100 Billion to $150

question 130

Multiple Choice

If an economy's real GDP increases from $100 billion to $150 billion, and at the same time its imports increase from $40 billion to $50 billion, then the marginal propensity to import

• A)decreases from 0.4 to 0.2.
• B)is greater than 0.2 and less than 0.4.
• C)is 0.2.
• D)is 0.36.
• E)is 0.4.

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Definitions:

Ending Inventory

The total value of all the merchandise, raw materials, work in process, and finished goods that a company has at the end of its fiscal period.

Segmented Income Statement

An income statement that breaks down revenues, expenses, and profits by individual segments, departments, or product lines of a business.

Contribution Format

An income statement format that separates fixed costs from variable costs to highlight the contribution margin of a company's products or services.

Apparel Segment

The apparel segment refers to the portion of a business or market that is focused on the production and sale of clothing and accessories.