The marginal propensity to consume describes ________.
A)the tendency to consume fringe,or unusual items
B)the impact of a change in spending on income
C)the impact on consumption resulting from a change in income
D)lifetime consumption resources

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) describes the impact on consumption resulting from a change in income. It represents the proportion of a change in income that is spent on consumption rather than saved or invested. For example, an MPC of 0.8 means that for every $1 increase in income, $0.80 will be spent on consumption.

The Marginal Propensity to Consume Describes ________