Question

What is meant by the term the marginal leakage rate?

a	Total leakages as a fraction of aggregate expenditures.
b	Total leakages as a fraction of the level of income.
c	The ratio of change in income that results from a change in leakages.
d	The ratio of change in leakages that results from a change in income.

What is the value of the MPE if MPC = 0.63; MPM = 0.1

a	0.053
b	0.53
c	0.73
d	0.83

What happens to the value of net exports as national income increases?

a	It increases because the level of imports increases.
b	It decreases because the level of imports increases.
c	It decreases because the level of imports decreases.
d	It increases because the level of imports decreases.

The following partial data relates to a national economy (all figures in $billions):

Y	Total Leakages	Total Injections
$0	$0	$400
100	40	400
200	80	400

What is the value of the marginal leakage rate?

a	0
b	0.4
c	0.6
d	1.67
e	2.5

What is the formula for the marginal propensity to expend?

a	∆ autonomous expenditures/∆ national income
b	∆ national income/∆ induced expenditures
c	∆ consumption/∆ national income
d	∆ aggregate expenditures/∆ national income

Answer 1