The marginal propensity to consume
A) increases when income increases.
B) is the change in consumption associated with a change in income.
C) is equal to consumption divided by income.
D) decreases when income increases.

Question

Quizplus · Accepted Answer

The marginal propensity to consume is the change in consumption associated with a change in income. It represents the fraction of each additional dollar of income that is spent on consumption. It does not necessarily increase or decrease when income increases.

The Marginal Propensity to Consume