The typical value for the MPC is less than 1.0.

Name: The typical value for the MPC is less than 1.0.
Brand: Quizplus
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Quizplus · Accepted Answer

The MPC (marginal propensity to consume) is defined as the change in consumption resulting from a change in income. It is typically less than 1.0 because people tend to save a portion of their income rather than spend it all. Therefore, they only consume a portion of their increased income, resulting in an MPC of less than 1.0.

The Typical Value for the MPC Is Less Than 1