Exhibit 10-4

-Refer to Exhibit 10-4.Marginal propensity to consume is equal to

Name: Exhibit 10-4 -Refer to Exhibit 10-4.Marginal propensity to consume is equal to
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Question

Exhibit 10-4
 
-Refer to Exhibit 10-4.Marginal propensity to consume is equal to

Quizplus · Accepted Answer

Marginal propensity to consume (MPC) is defined as the change in consumption resulting from a change in income. In the given exhibit, MPC is equal to the change in AF (the change in consumption) divided by the change in C₀F (the change in income). Therefore, the correct formula for MPC is AF/C₀F, which corresponds to choice C.

Exhibit 10-4 -Refer to Exhibit 10-4.Marginal Propensity to Consume Is Equal to Consume