Exhibit 10-8

-In Exhibit 10-8, the marginal propensity to consume is

Name: Exhibit 10-8 -In Exhibit 10-8, the marginal propensity to consume is
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Question

Exhibit 10-8
 
-In Exhibit 10-8, the marginal propensity to consume is

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the change in consumption associated with a change in income. In this exhibit, the consumption expenditure (C) changes by $700 when income (Y) increases from $1,000 to $1,500. Therefore, the MPC can be calculated by dividing the change in C by the change in Y: 700/500 = 0.7.

Exhibit 10-8 -In Exhibit 10-8, the Marginal Propensity to Consume Is