If Oscar's MPC is 0.95 and he earns an additional $2,000, how much would he spend?
A)$100
B)$1,900
C)$2,105
D)$40,000

Name: If Oscar's MPC is 0.95 and he earns an additional $2,000, how much would he spend? A)$100 B)$1,900 C)$2,105 D)$40,000
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Question

If Oscar's MPC is 0.95 and he earns an additional $2,000, how much would he spend?
A)​$100
B)​$1,900
C)​$2,105
D)​$40,000

Quizplus · Accepted Answer

Oscar's marginal propensity to consume (MPC) is 0.95, which means he spends 95% of any additional income. Therefore, if he earns an additional $2,000, he would spend 0.95 x $2,000 = $1,900.

If Oscar's MPC Is 0