The marginal propensity to consume is found by
A) dividing the change in disposable income by the change in consumption expenditure.
B) dividing consumption expenditure by disposable income.
C) dividing disposable income by consumption expenditure.
D) dividing the change in consumption expenditure by the change in disposable income.

Question

Quizplus · Accepted Answer

The marginal propensity to consume is the change in consumption expenditure divided by the change in disposable income, as it measures the amount by which consumption expenditure changes as disposable income increases. Therefore, the correct choice is D, which divides the change in consumption expenditure by the change in disposable income.

The Marginal Propensity to Consume Is Found by