If consumption spending changes by $6 trillion when disposable income changes by $8 trillion, the marginal propensity to consume is equal to
A) $2 trillion.
B) 1.333.
C) $14 trillion.
D) .75.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated by dividing the change in consumption spending by the change in disposable income, which is $6 trillion / $8 trillion = 0.75.

If Consumption Spending Changes by $6 Trillion When Disposable Income