If the Marginal Propensity to Import (M)is Greater Than Zero,the

question 84

Multiple Choice

If the marginal propensity to import (m) is greater than zero,the income-expenditure multiplier is smaller than when m is equal to zero because

• A) as income increases,some of the additional consumption expenditure will be on imported goods.
• B) as income increases,less consumption expenditure will be on imported goods.
• C) as income decreases,there will be additional consumption expenditure on imported goods.
• D) as income increases,there will be a decrease in consumption expenditure.
• E) as income increases,there will be an increase in the amount of taxes paid.

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