The marginal propensity to consume equals
A) the change in consumption expenditure divided by the change in disposable income.
B) the change in consumption expenditure divided by disposable income.
C) consumption expenditure divided by disposable income.
D) consumption expenditure divided by the change in disposable income.

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) measures the change in consumption expenditure associated with a change in disposable income. It is calculated as the change in consumption expenditure divided by the change in disposable income, making choice A the correct answer.

The Marginal Propensity to Consume Equals