If consumption increases by $9 when disposable income increases by $10, the marginal propensity to consume (mpc)equals:
A)0.1.
B)0.9.
C)1.0.
D)9.0.

Name: If consumption increases by $9 when disposable income increases by $10, the marginal propensity to consume (mpc)equals: A)0.1. B)0.9. C)1.0. D)9.0.
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Question

Quizplus · Accepted Answer

If consumption increases by $9 in response to a $10 increase in disposable income, then consumption rose $0.90 for every $1 increase in disposable income, making the mpc equal to 0.9.

If Consumption Increases by $9 When Disposable Income Increases by $10