The "marginal propensity to consume" refers to the additional
A)desired saving that occurs out of an additional dollar of disposable income.
B)desired consumption that occurs out of an additional dollar of disposable income.
C)desired consumption that occurs out of an additional dollar of investment.
D)desired consumption caused by a change in tastes.
E)desired consumption that occurs out of an additional dollar of national income.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) refers to the additional desired consumption that occurs out of an additional dollar of disposable income. In other words, it is the proportion of every extra dollar of income that a consumer chooses to spend rather than save.

The "Marginal Propensity to Consume" Refers to the Additional