Answer to Question #108359 in Macroeconomics for Zaskia

Question

1) which of the following is incorrect about imports in Keynesian model?
• they not always taken as independent of the level of income
•increase when the level of income increases
•decrease when the level of income increases
•

Answer 1

Imports increase when level of income increases. This is because marginal propensity to import is lower at higher income.