Question

The marginal propensity to consume tells us by how much ______ changes when ______ changes. a. consumption expenditure; disposable income

Answer 1

The marginal propensity to consume tells us by how much consumption expenditure changes when disposable income  changes.

What is marginal propensity?

In economics, the marginal propensity to consume (MPC) is defined as the proportion of an aggregate raise in pay that a consumer spends on the consumption of goods and services, as opposed to saving it.

What is the MPC and MPS?

Key Takeaways. The marginal propensity to save (MPS) is the portion of each extra dollar of a household's income that's saved. MPC is the portion of each extra dollar of a household's income that is consumed or spent.

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