Use the following table to answer these questions: Y C I G X $ 500 $ 500 $ 10 $ 20 $ 60 $ 600 $ 590 $ 10 $ 20 $ 40 $ 700 $ 680 $ 10 $ 20 $ 20 $ 800 $ 770 $ 10 $ 20 $ 0 $ 900 $ 860 $ 10 $ 20 - $ 20 $ 1,000 $ 950 $ 10 $ 20 - $ 40 What is the Marginal Propensity to Import?
6. Use the following table to answer these questions:
Y C I G X
$ 500 $ 500 $ 10 $ 20 $ 60
$ 600 $ 590 $ 10 $ 20 $ 40
$ 700 $ 680 $ 10 $ 20 $ 20
$ 800 $ 770 $ 10 $ 20 $ 0
$ 900 $ 860 $ 10 $ 20 - $ 20
$ 1,000 $ 950 $ 10 $ 20 - $ 40
- What is the Marginal Propensity to Import?
Since we do not have imports and exports values separately, but we have net export values (X). So, we will expand this table back to the $0 level of GDP. As we are moving down in the table the net export is decreasing by $20, so when we move upward it will increase by $20.
At the level of $0 income Y, the net export is 160. Now, suppose the export is autonomous which do not increase with an increase in income and the import is increasing with the increase in income, so the import is $0 at $0 level of income. So, the export is fixed at $160. For other levels of income, we can find the value or import by subtracting the net export from exports.
Y Export Import X
$ 0 $ 160 $ 0 $ 160
$ 100 $ 160 $ 20 $ 140
$ 200 $ 160 $ 40 $ 120
$ 300 $ 160 $ 60 $ 100
$ 400 $ 160 $ 80 $ 80
$ 500 $ 160 $ 100 $ 60
$ 600 $ 160 $ 120 $ 40
$ 700 $ 160 $ 140 $ 20
$ 800 $ 160 $ 160 $ 0
$ 900 $ 160 $ 180 - $ 20
$ 1,000 $ 160 $ 200 - $ 40
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