Figure 13-2
-Refer to Figure 13-2. The marginal propensity to consume equals
A) 0.
B) 0.5.
C) 1.0.
D) 2.0.

Name: Figure 13-2 -Refer to Figure 13-2. The marginal propensity to consume equals A) 0. B) 0.5. C) 1.0. D) 2.0.
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Question

Figure 13-2 
-Refer to Figure 13-2. The marginal propensity to consume equals
A) 0. 
B) 0.5. 
C) 1.0. 
D) 2.0.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the change in consumption for a change in income. In this figure, the slope of the consumption function is 0.5, indicating that for every $1 increase in income, consumption increases by $0.50. Therefore, the MPC is 0.5.

Figure 13-2 -Refer to Figure 13-2. the Marginal Propensity to Consume Equals