What is the value of the MPC if $66 out of every $100 increase in disposable income is consumed?
A) 0.34
B) $166
C) $34
D) 0.66
E) More information is needed to determine the MPC.

Question

Quizplus · Accepted Answer

The Marginal Propensity to Consume (MPC) is calculated as the change in consumption divided by the change in disposable income. If $66 out of every $100 increase in disposable income is consumed, the MPC is 66/100 = 0.66.

What Is the Value of the MPC If $66 Out