-Refer to the above diagram.The marginal propensity to consume is:
A) .2.
B) .8.
C) .4.
D) .3.

Name: -Refer to the above diagram.The marginal propensity to consume is: A) .2. B) .8. C) .4. D) .3.
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Question

-Refer to the above diagram.The marginal propensity to consume is:
A) .2. 
B) .8. 
C) .4. 
D) .3.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the change in consumption divided by the change in income. If the diagram shows that for every additional dollar of income, consumption increases by 80 cents, then the MPC is 0.8.

-Refer to the Above Diagram