Exhibit 15-1 Disposable income and consumption data

-In Exhibit 15-1,when disposable income (Y)is increased from $1,000 to $2,000,the marginal propensity to consume is:

Question

Exhibit 15-1 Disposable income and consumption data
 
-In Exhibit 15-1,when disposable income (Y)is increased from $1,000 to $2,000,the marginal propensity to consume is:

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated as the change in consumption divided by the change in disposable income. If the MPC is 0.8, it means that for every additional dollar of income, consumption increases by 80 cents.

Exhibit 15-1 Disposable Income and Consumption Data