The marginal propensity to consume:
A)is the change in consumption divided by the change in saving.
B)is usually higher for unemployed individuals than for people who are very wealthy.
C)is equal to the marginal propensity to save plus 1.
D)tells policy makers the additional amount of investment spending that would accompany an additional amount of government spending.

Question

Quizplus · Accepted Answer

The marginal propensity to consume is the change in consumption divided by the change in income. It tends to be higher for individuals with lower incomes, such as the unemployed, and lower for individuals with higher incomes, such as the wealthy.

The Marginal Propensity to Consume