The marginal propensity to consume equals 1 minus the

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Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is defined as the rate at which individuals increase their consumption when their income increases by $1. Therefore, if the MPC is 0.8, it means that for every additional $1 in income, individuals will increase their consumption by $0.8, and save $0.2. Since the MPC is the rate of increase in consumption, the marginal propensity to save (MPS) is equal to 1 minus the MPC. Therefore, the answer is C, marginal propensity to save.

The Marginal Propensity to Consume Equals 1 Minus the