If the MPC = 0.75 for a particular person this means that:
A) they will spend 75 cents of each new dollar they get.
B) if they receive $1 they want to spend roughly 75%, but probably won't do so.
C) they will spend 25 cents of the $1 and save 75 cents.
D) if they receive $1 then they want to spend 25% of it.

Question

Quizplus · Accepted Answer

MPC stands for marginal propensity to consume, which is the fraction of each additional dollar of income that is spent on consumption. An MPC of 0.75 means that for every additional dollar of income, the person will spend 75 cents of it on consumption.