If Ben's MPC is .80, this means that he will:
A)spend eight-tenths of any increase in his disposable income.
B)spend eight-tenths of any level of disposable income.
C)break even when his disposable income is $8,000.
D)save eight-tenths of any level of disposable income.

Question

Quizplus · Accepted Answer

MPC stands for Marginal Propensity to Consume which is the proportion of an increase in disposable income that is spent on consumption. A MPC of .80 means that Ben will spend 80% or eight-tenths of any increase in his disposable income.

If Ben's MPC Is