In general, households with lower wealth tend to have a(n) _______ MPC relative to wealthier households.
A) lower
B) higher
C) similar
D) identical

Question

Quizplus · Accepted Answer

Wealthier households typically save a larger portion of an additional dollar earned, while lower wealth households are more likely to spend an additional dollar on consumption. Therefore, households with lower wealth tend to have a higher Marginal Propensity to Consume (MPC).

In General, Households with Lower Wealth Tend to Have A(n)