The MPC can be defined as the fraction of a:
A)change in income which is not spent.
B)change in income which is spent.
C)given total income which is not consumed.
D)given total income which is consumed.

Question

Quizplus · Accepted Answer

The MPC (marginal propensity to consume) is the fraction of a change in income that is spent. This means that if someone receives an additional $100 in income and spends $70 of it, their MPC would be 0.7, indicating that they spend 70% of any increase in their income. Therefore, the correct answer is B.

The MPC Can Be Defined as the Fraction of A