The marginal propensity to consume is the rate at which aggregate expenditure increases when investment spending increases.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the proportion of an increase in income that gets spent on consumption. It does not directly relate to how aggregate expenditure increases when investment spending increases; that concept is more closely related to the multiplier effect.

The Marginal Propensity to Consume Is the Rate at Which