If the consumption function is expressed as C = a + mpc × YD,then "mpc" represents
A)autonomous consumer expenditure.
B)the marginal propensity to consume.
C)the expenditure multiplier.
D)disposable income.

Question

Quizplus · Accepted Answer

mpc stands for marginal propensity to consume, which represents the additional amount of consumption that will result from an additional unit of disposable income. Therefore, option B is the correct choice as it represents the meaning of mpc in the given consumption function.

If the Consumption Function Is Expressed as C = a