-In the above table, C is consumption expenditure, I is investment, G is government expenditure, X is exports, and M is imports. All entries are in dollars. What is the marginal propensity to consume?
A) 0.20
B) 0.25
C) 0.75
D) 0.80

Question

-In the above table, C is consumption expenditure, I is investment, G is government expenditure, X is exports, and M is imports. All entries are in dollars. What is the marginal propensity to consume?
A) 0.20 
B) 0.25 
C) 0.75 
D) 0.80

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated by the change in consumption (ΔC) divided by the change in income (ΔY). Without specific numbers from a table, we can't calculate an exact value, but MPC typically ranges between 0 and 1, with 0.75 being a common estimate for economies where consumers tend to spend a large portion of additional income.

-In the Above Table, C Is Consumption Expenditure, I Is