The marginal propensity of consume is equal to ?
Correct answer: C. Change in consumption / change in income
- A. Total spending / total consumption
- B. Total consumption / total income
- C. Change in consumption / change in income
- D. Change in consumption / change in savings
Explanation
The marginal propensity to consume measures the additional consumption generated by an additional unit of income, so it is calculated as ΔC/ΔY. Consumption divided by income is the average propensity to consume, not the marginal one.
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