The marginal propensity to consume (MPC) is the:
A)tendency that consumers have to spend more than they save.
B)total consumption as a percentage of real GDP in a country.
C)fraction of each dollar of extra income that households save.
D)fraction of each dollar of extra income that households spend on consumption.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the fraction of each dollar of extra income that households spend on consumption. It measures the change in consumption spending resulting from a change in disposable income.

The Marginal Propensity to Consume (MPC) Is The