Exhibit 23-2
-Given the data in Exhibit 23-2, what is the marginal propensity to consume?

Question

Exhibit 23-2 
-Given the data in Exhibit 23-2, what is the marginal propensity to consume?

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated by the change in consumption divided by the change in income. Without the specific data from Exhibit 23-2, the general formula is MPC = ΔC / ΔY. Given the choices, if we assume a typical scenario where consumption increases as income increases, an MPC of 0.80 is a common value indicating that for every additional dollar of income, consumption increases by 80 cents.

Exhibit 23-2 -Given the Data in Exhibit 23-2, What Is the Marginal