If national income increases by $80 million and consumption increases by $20 million, the marginal propensity to consume is:
A)5
B)0.25.
C)0.75.
D)0.15.

Name: If national income increases by $80 million and consumption increases by $20 million, the marginal propensity to consume is: A)5 B)0.25. C)0.75. D)0.15.
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Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated by dividing the change in consumption by the change in income, which is $20 million / $80 million = 0.25.

If National Income Increases by $80 Million and Consumption Increases