The following question are based on the following information for a society:

-If disposable income increases from $1,900 to $2,000 billion,the marginal propensity to consume is
A) 0.8.
B) 0.84.
C) 0.92.
D) 1.0.
E) 1.08.

Question

The following question are based on the following information for a society:
 
-If disposable income increases from $1,900 to $2,000 billion,the marginal propensity to consume is
A) 0.8. 
B) 0.84. 
C) 0.92. 
D) 1.0. 
E) 1.08.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated as the change in consumption divided by the change in disposable income. If the MPC is 0.8, it means that for every additional dollar of income, consumption increases by 80 cents.

The Following Question Are Based on the Following Information for a Society