The marginal propensity to consume is:
A)expected to be between zero and one.
B)equal to disposable income divided by consumption.
C)the amount by which consumption changes when wealth increases by one dollar.
D)normally assumed to increase as taxes increase.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the fraction of additional income that a household consumes rather than saves, and it is expected to be between zero and one.

The Marginal Propensity to Consume Is