What is the definition of "marginal propensity to consume"?
A)the change in desired consumption divided by the change in saving that brought it about
B)the change in desired consumption divided by total disposable income
C)the change in desired consumption divided by the change in disposable income that brought it about
D)total desired consumption divided by total disposable income
E)total desired consumption divided by the change in disposable income that brought it about

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is defined as the change in desired consumption divided by the change in disposable income that brought it about. It represents the proportion of an additional dollar of disposable income that households will spend on consumption.

What Is the Definition of "Marginal Propensity to Consume