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4 years ago

The marginal propensity to consume is:

Business

1 answer:

larisa [96]4 years ago

3 0

Answer:

The correct answer is option c.

Explanation:

The marginal propensity to consume or MPC measures the change in consumption or consumer spending due to a change in the disposable income of the consumer.

The disposable income is the income left with consumers after paying taxes and transfers.

It is calculated as the ratio of change in consumption to change in income. It is written as

MPC = $\frac{\Delta C}{\Delta Y}$

The MPC is higher at lower incomes.

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3 years ago

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