What is the value of the MPC if $66 out of every $100 increase in disposable income is consumed?
A) 0.66
B) $166
C) 0.34
D) $34
E) More information is needed to determine the MPC.

Question

Quizplus · Accepted Answer

MPC (Marginal Propensity to Consume) is the fraction of a change in income that is spent on consumption. In this case, out of every $100 increase in disposable income, $66 is consumed. Therefore, the MPC is 66/100, which is equal to 0.66.

What Is the Value of the MPC If $66 Out