The marginal propensity to consume goods and services can be broken out into the:
A) marginal propensity to invest plus the marginal propensity to save.
B) marginal propensity to consume home-produced goods and services plus the marginal propensity to consume imports.
C) marginal propensity to spend minus the marginal propensity to save.
D) marginal propensity to consume goods plus the marginal propensity to consume services.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) can be broken down into the marginal propensity to consume home-produced goods and services plus the marginal propensity to consume imports. This distinction is important because it reflects how domestic consumption and imports contribute to overall consumption patterns.

The Marginal Propensity to Consume Goods and Services Can Be