The smaller the amount saved out of a change in disposable income,the
A)more horizontal the consumption function.
B)more net taxes affect consumption.
C)larger the MPC.
D)smaller the MPC.
E)smaller is autonomous consumption.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the fraction of additional income that is spent on consumption. If a smaller amount is saved, a larger portion is consumed, indicating a larger MPC.

The Smaller the Amount Saved Out of a Change in Disposable