With which of the following marginal propensities to consume would a given change in disposable income have the smallest effect on consumption?
A)0.2
B)0.4
C)0.6
D)0.8

Question

Quizplus · Accepted Answer

A marginal propensity to consume (MPC) of 0.2 means that only 20% of any change in disposable income will be spent on consumption, resulting in the smallest effect on consumption compared to higher MPC values.

With Which of the Following Marginal Propensities to Consume Would