If disposable income increases by $400 billion and consumption increases by $300 billion, the MPC equals
A)0.75.
B)0.60.
C)0.80.
D)0.68.

Name: If disposable income increases by $400 billion and consumption increases by $300 billion, the MPC equals A)0.75. B)0.60. C)0.80. D)0.68.
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Question

Quizplus · Accepted Answer

The Marginal Propensity to Consume (MPC) is calculated by dividing the change in consumption by the change in disposable income, which is $300 billion / $400 billion = 0.75.

If Disposable Income Increases by $400 Billion and Consumption Increases