The marginal propensity to consume is:
A) the change in income divided by the change in consumption.
B) consumption spending divided by income.
C) income divided by consumption spending.
D) the change in consumption divided by the change in income.
E) the change in consumption divided by income.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is defined as the change in consumption divided by the change in income. In other words, it measures the fraction of additional income that is spent on consumption. Therefore, the correct choice is D, which is the change in consumption divided by the change in income.

The Marginal Propensity to Consume Is