Suppose That When Disposable Income Increases by $2,000, Consumption Spending

question 196

Multiple Choice

Suppose that when disposable income increases by $2,000, consumption spending increases by $1,500. Given this information, we know that the marginal propensity to consume (MPC) is

• A) 0.25.
• B) 0.75.
• C) 1.33.
• D) 4.

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