The marginal propensity to consume is defined as:
A)the ratio of change in consumption on both domestic and foreign items to the change in income
B)the change in consumption on domestic and foreign items multiplied by the change in income
C)the ratio of the change in consumption on domestic items to the change in income
D)the change in consumption on domestic items multiplied by the change in income
E)average consumption as a proportion of income

Question

Quizplus · Accepted Answer

The marginal propensity to consume is defined as the ratio of the change in consumption on domestic items to the change in income. This represents the proportion of additional income that is spent on domestic items.

The Marginal Propensity to Consume Is Defined As