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2 years ago

If a household's income rises from $46,000 to $48,000 and its consumption spending rises from $38,00 to $39,500 then the MPC is

Business

1 answer:

bulgar [2K]2 years ago

7 0

Answer:

0.5

Explanation:

marginal propensity to consume Can be regarded as the increase in pay that is been consumer experience on the purchasing of products which is just a part at aggregate. Instead of consumer to save

We are told that income rises from $46,000 to $48,000.

The difference= $48,000-$46,000= $2000

✓consumption spending rises from $38,00 to $39,500

The difference= $39,500-$38,00= $1000

Then the marginal propensity to consume can calculated as ratio of the difference in consumption spending to income rise

=1000/2000=0.5

Therefore, the MPC is 0.5

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