The marginal propensity to consume is
A)the change in consumption associated with a change in income.
B)equal to the marginal propensity to save minus 1.
C)equal to 1 minus the marginal tax rate.
D)the change in consumption associated with a change in wealth.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is defined as the change in consumption associated with a change in income. It measures how much of an increase in income is spent on consumption. If the MPC is 0.6, for example, it means that for every $1 increase in income, $0.60 will be spent on consumption.

The Marginal Propensity to Consume Is