A higher MPC means that a given change in net taxes would have a greater effect on a persons' consumption spending.

Question

Quizplus · Accepted Answer

Because a higher MPC means that people are more likely to spend a larger portion of any additional income they receive, a given change in net taxes will have a greater effect on their consumption spending. This is because the change in net taxes will result in a change in disposable income, which in turn will change how much people decide to consume.

A Higher MPC Means That a Given Change in Net