The marginal propensity to consume is
A) the change in consumption expenditure divided by the change in disposable income.
B) the change in consumption expenditure divided by total disposable income.
C) total consumption expenditure divided by the change in disposable income.
D) the change in consumption expenditure divided by total saving.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the change in consumption expenditure divided by the change in disposable income. It measures the proportion of additional disposable income that is spent on consumption.

The Marginal Propensity to Consume Is