The marginal propensity to consume is the ratio of consumption to disposable income.

Name: The marginal propensity to consume is the ratio of consumption to disposable income.
Brand: Quizplus
Rating: 4.7 (37 reviews)

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the proportion of an additional amount of disposable income that is spent on consumption. It is not the ratio of total consumption to total disposable income, but rather the ratio of the change in consumption to the change in disposable income.

The Marginal Propensity to Consume Is the Ratio of Consumption