-The above table contains information about the nation of Syldavia.There are no income taxes or imports in this nation.The marginal propensity to consume in Syldavia is equal to
A)5.00.
B)0.20.
C)0.40.
D)0.80.
E)0.75.

Question

-The above table contains information about the nation of Syldavia.There are no income taxes or imports in this nation.The marginal propensity to consume in Syldavia is equal to
A)5.00. 
B)0.20. 
C)0.40. 
D)0.80. 
E)0.75.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the proportion of additional income that is spent on consumption. In the absence of income taxes or imports, the MPC can be calculated by examining the change in consumption relative to the change in income. An MPC of 0.80 means that for every additional unit of income, 80% is spent on consumption.

-The Above Table Contains Information About the Nation of Syldavia