The marginal propensity to consume is
A) the rate at which consumption increases as GDP increases.
B) the rate at which consumption increases as disposable income increases.
C) equal to 1 divided by the slope of the consumption function.
D) the rate at which tax revenue climbs as consumption increases.
E) none of the above.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is defined as the rate at which consumption increases as disposable income increases. This concept is crucial in economics because it helps to understand how income changes affect consumption levels.

The Marginal Propensity to Consume Is