What is the marginal propensity to consume if a $100 million increase in total income leads to a $58 million increase in consumption?
A)4.2
B)5.8
C)0.58
D)0.42

Name: What is the marginal propensity to consume if a $100 million increase in total income leads to a $58 million increase in consumption? A)4.2 B)5.8 C)0.58 D)0.42
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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 income. In this case, MPC = $58 million / $100 million = 0.58.

What Is the Marginal Propensity to Consume If a $100