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Suppose two successive levels of disposable personal income are $16 and $21 billion, respectively, and the change in consumption spending between these two levels of disposable personal income is $2 billion,
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Suppose two successive levels of disposable personal income are $16 and $21 billion, respectively, and the change in consumption spending between these two levels of disposable personal income is $2 billion, then the MPC will be equal to _____.

User MaxPlankton
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1 Answer

1 vote

Answer:

The correct answer is 0.4

Step-by-step explanation:

Marginal Propensity to consume

21 Billions- 16 Billions = 5 Billions

2 Billion ÷ 5 Billions = 0.4

The MPC will be equal to 0.4

User Nickolas
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