-Using the data in above table, the marginal propensity to consume is
A) increasing as disposable income increases.
B) constant at 0.75.
C) equal to 1.0 when disposable income equals $600.
D) constant at 0.25.

Question

-Using the data in above table, the marginal propensity to consume is
A) increasing as disposable income increases. 
B) constant at 0.75. 
C) equal to 1.0 when disposable income equals $600. 
D) constant at 0.25.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is constant at 0.75, meaning that for every additional dollar of disposable income, consumption increases by 75 cents.

-Using the Data in Above Table, the Marginal Propensity to Consume