That fraction of a change in disposable income that is consumed is called
A)autonomous consumption
B)induced consumption
C)the multiplier
D)the marginal propensity to consume
E)the marginal propensity to save

Question

Quizplus · Accepted Answer

The fraction of a change in disposable income that is consumed is called the marginal propensity to consume (MPC). It reflects the increase in consumer spending resulting from an increase in disposable income. Therefore, the correct answer is D, the marginal propensity to consume.

That Fraction of a Change in Disposable Income That Is