Question

Write the formula for Marginal Propensity to Consume.

Answer 1

Answer:

Understanding Marginal Propensity To Consume (MPC)

The marginal propensity to consume is equal to ΔC / ΔY, where ΔC is the change in consumption, and ΔY is the change in income. If consumption increases by 80 cents for each additional dollar of income, then MPC is equal to 0.8 / 1 = 0.8.

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