Mauritius, as a highly globalised island economy, is strongly influenced by fluctuations in international trade. Due to its size and reliance on foreign goods, it has a notable marginal propensity to import. Between 2022 and 2023, the mean annual disposable income of households in Mauritius increased from 450,000 MUR to 510,000 MUR. Over the same period, the mean annual household expenditure on imported goods and services rose from 135,000 MUR to 156,000 MUR.
Using the information provided, calculate the marginal propensity to import (MPM) for Mauritian households between 2022 and 2023.
14 exam-style questions on OCR A Level Economics Circular flow of income. Each one has a worked solution and a mark scheme showing where the marks go.