The _____ measure(s) the proportion of additional income that consumers spend.
A) spending multiplier
B) marginal propensity to consume
C) marginal propensity to save
D) spending multiplier, the marginal propensity to consume, and the marginal propensity to save

Question

Quizplus · Accepted Answer

The marginal propensity to consume measures the proportion of additional income that consumers spend. The spending multiplier is a related concept, but it is a measure of the overall impact on the economy of a change in spending or investment. The marginal propensity to save is the proportion of additional income that consumers save rather than spend.

The _____ Measure(s) the Proportion of Additional Income That Consumers