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Economics miscellaneous

  1. The marginal propensity to consume lies between
    1. 0 to 1
    2. 0 to ¥
    3. 1 to ¥
    4. ¥ to ¥
Correct Option: A

The Marginal Propensity to Consume (MPC) is measured as the ratio of the change in consumption to the change in income, thus giving us a figure between 0 and 1. The MPC can be more than one if the subject borrowed money to finance expenditures higher than their income. One minus the MPC equals the marginal propensity to save.



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