If consumers spend 98 cents out of every extra dollar received,the:
A) MPC is 98.
B) MPS is 1.02.
C) MPC is 0.98.
D) MPC is 0.02

Name: If consumers spend 98 cents out of every extra dollar received,the: A) MPC is 98. B) MPS is 1.02. C) MPC is 0.98. D) MPC is 0.02
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Question

Quizplus · Accepted Answer

The Marginal Propensity to Consume (MPC) is the fraction of additional income that a household spends on consumption. If consumers spend 98 cents out of every extra dollar, the MPC is 0.98.

If Consumers Spend 98 Cents Out of Every Extra Dollar