Use the figure below to answer the following questions.

Figure 27.2.3
There are no taxes in this economy.
-In Figure 27.2.3, the marginal propensity to consume, assuming no income taxes, is
A)0.3.
B)0.6.
C)0.9.
D)1.0.
E)0.93.

Question

Use the figure below to answer the following questions.
  
Figure 27.2.3
There are no taxes in this economy.
-In Figure 27.2.3, the marginal propensity to consume, assuming no income taxes, is
A)0.3. 
B)0.6. 
C)0.9. 
D)1.0. 
E)0.93.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the fraction of additional income that is spent on consumption. An MPC of 0.9 means that for every additional dollar of income, 90 cents are spent on consumption.

Use the Figure Below to Answer the Following Questions