Question

Income rises from Rs.50,000 to Rs.60,000 and consumption rises from Rs. 40,000 to Rs.48,000,What will be the value of MPC?

Answer 1

Answer:

MPC= CHANGE IN C / CHANGE IN INCOME

MPC= 8000/10000

MPC= 0.8

Explanation:

THE FORMULA FOR MPC IS CHANGE IN CONSUMPTION UPON CHANGE IN INCOME.

WHICH MEANS THE ADDITIONAL CONSUMPTION IN RELATION TO THE ADDITIONAL INCOME.