MPC being equal to 0.5, what will be, if income increases by Rs. 100?
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Answer:
Explanation:
The marginal propensity to consume (MPC) measures how consumer spending changes with a change in income. Using the figures above, the MPC is ΔC / ΔY = 300/600 = 0.5.
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MPC stands for Marginal Propensity to Consume.
The percentage of a raise that is spent on consumption rather than saving is known as marginal propensity to consume (MPC).
Given,
We know,
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