If national income increases by $75 million and consumption increases by $15 million, the marginal propensity to consume is
A)5.
B)0.80.
C)0.75.
D)0.20.
E)0.15.

Name: If national income increases by $75 million and consumption increases by $15 million, the marginal propensity to consume is A)5. B)0.80. C)0.75. D)0.20. E)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 $15 million / $75 million = 0.20.

If National Income Increases by $75 Million and Consumption Increases