If Trent's MPC is .80,this means that he will:
A) spend eight-tenths of any increase in his disposable income.
B) spend eight-tenths of any level of disposable income.
C) break even when his disposable income is $8,000.
D) save two-tenths of any level of disposable income.

Question

Quizplus · Accepted Answer

MPC or marginal propensity to consume represents the proportion of any increase in disposable income that a person chooses to spend. Therefore, if Trent's MPC is 0.80, it means that he will spend eight-tenths or 80% of any increase in his disposable income.

If Trent's MPC Is