When Jack's income increases by $5,000,he spends an additional $4,000 dollars.This implies that his marginal propensity to consume is 1.25.

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The marginal propensity to consume is calculated as the change in consumption divided by the change in income. In this case, the change in consumption is only $4,000 while the change in income is $5,000, thus the marginal propensity to consume is 0.8.

When Jack's Income Increases by $5,000,he Spends an Additional $4,000