If the marginal propensity to consume is equal to 0.65,then a $100 increase in disposable income leads to a _________ increase in consumption.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) of 0.65 means that for every additional dollar of disposable income, consumption increases by $0.65. Therefore, a $100 increase in disposable income leads to a $65 increase in consumption.

If the Marginal Propensity to Consume Is Equal to 0