If the Hennige family's marginal propensity to consume is 0.70, then it will necessarily consume seven-
tenths of its total income.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) refers to the proportion of additional income that a family will spend on consumption. If the Hennige family's MPC is 0.70, it means they will consume seven-tenths of any additional income, not necessarily seven-tenths of their total income.

If the Hennige Family's Marginal Propensity to Consume Is 0