-Refer to the table in the exhibit.What does the marginal propensity to consume (MPC) equal?
A) 0.20, or 1/5
B) 0.40, or 2/5
C) 0.80, or 4/5
D) 0.90, or 9/10

Question

-Refer to the table in the exhibit.What does the marginal propensity to consume (MPC) equal?  
A) 0.20, or 1/5 
B) 0.40, or 2/5 
C) 0.80, or 4/5 
D) 0.90, or 9/10

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated as the change in consumption divided by the change in income. The choice that represents a ratio of 4/5 or 0.80 correctly reflects this calculation.

-Refer to the Table in the Exhibit