The marginal propensity to consume out of a permanent change in income is approximately:
A)1
B)0.5
C)0
D)none of the above.

Name: The marginal propensity to consume out of a permanent change in income is approximately: A)1 B)0.5 C)0 D)none of the above.
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Quizplus · Accepted Answer

The marginal propensity to consume (MPC) out of a permanent change in income is typically close to 1, meaning that when individuals perceive an increase in their permanent income, they are likely to increase their consumption by nearly the same amount.

The Marginal Propensity to Consume Out of a Permanent Change