The value of the marginal propensity to consume is
A) between 1 and 10.
B) between 0 and 1.
C) between - 1 and +1.
D) between 1 percent and 10 percent.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the ratio of the change in consumption to the change in income. It measures how much of an additional dollar of income is spent on consumption. It can range from 0 to 1, as consumption cannot exceed income. Therefore, the best choice is B, which states that the MPC is between 0 and 1.

The Value of the Marginal Propensity to Consume Is