If the national consumption function is given by find the marginal propensity to consume, .

Question

If the national consumption function is given by  find the marginal propensity to consume,  . ​

Quizplus · Accepted Answer

The marginal propensity to consume is the change in consumption divided by the change in income. Since we don't have information about changes, we can find the marginal propensity to consume by looking at the coefficient of income in the consumption function.

The coefficient of income is the slope of the consumption function and also represents the marginal propensity to consume.

So, the marginal propensity to consume in this case is 0.6455.

Therefore, the answer is A.

If the National Consumption Function Is Given by Find