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The Marginal Propensity to Consume (Mpc)

Question 7

Multiple Choice

The marginal propensity to consume (mpc)


A) shows the fraction of total national income that is used for consumption
B) added to the marginal propensity to save (mps) always equals zero
C) is the relationship between a change in consumer purchases and the change in disposable income that allows consumption to change
D) declines as disposable income declines, eventually becoming zero as disposable income reaches zero
E) decreases as autonomous saving increases

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