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If your marginal propensity to consume is 0. 4 and you get an additional $300 in income, you would spend ________ on consumption.
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31 votes
31 votes
If your marginal propensity to consume is 0. 4 and you get an additional $300 in income, you would spend ________ on consumption.

User PedroKTFC
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1 Answer

12 votes
12 votes

Answer:

$120

Step-by-step explanation:

.4 x 300 = $120

the MPC (Marginal propensity to consume) is essentially the same as saying this is how much of your additional income to spend. In this case, you spend .4 of your additional income. Multiplying .4 by $300 in additional income results in $120

User Tiago Duarte
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