If a person's MPC is 0.75 it means they will:
A) spend 75 cents of each new dollar they receive.
B) invest 75 cents of every new dollar they receive.
C) spend 25 cents and save 75 cents of each additional dollar they earn.
D) spend 25 percent of any additional money earned.

Question

Quizplus · Accepted Answer

MPC (Marginal Propensity to Consume) represents the fraction or percentage of each additional dollar of income that is spent on consumption. In this case, an MPC of 0.75 means that for every additional dollar of income received, 75 cents will be spent on consumption. Therefore, choice A is the correct answer.

If a Person's MPC Is 0