Given the equations for C,I,G,and NX below,what is the value of the marginal propensity to consume? C = 1,000 + 0.8Y
I = 1,500
G =1,250
NX = 100
A)0.2
B)0.8
C)1.8
D)10

Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is defined as the change in consumption (C) divided by the change in income (Y). In the equation C = 1,000 + 0.8Y, the coefficient of Y (0.8) represents the MPC. Therefore, the value of the MPC in this case is 0.8.

Given the Equations for C,I,G,and NX Below,what Is the Value