What does the marginal propensity to consume tell us?
A)how much of our total income we spend on current consumption
B)how much additional income is spent on consumption
C)how much of aggregate expenditures will be allocated to consumption spending
D)how much induced consumption there is in the economy
E)the relationship between autonomous and induced consumption

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) tells us how much additional income will be spent on consumption. In other words, it measures the responsiveness of consumption to changes in income. For example, an MPC of 0.8 means that for every additional dollar of income, 80 cents will be spent on consumption.

What Does the Marginal Propensity to Consume Tell Us