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"If the marginal propensity to consume is​ ________, then a​ $2 trillion increase in disposable income increases consumption expenditure by​ $1.2 trillion. If the marginal propensity to consume is​ ________, then a​ $2 trillion increase in disposable income increases consumption expenditures by​ $1.6 trillion."

Respuesta :

Answer:

A: 0.6

B: 0.8

Explanation:

Marginal Propensity to Consume is ratio of  change in Consumption Expenditure to change in price .                                                                       It signifies portion of additional income which is spent on consumption .

MPC = ΔC / ΔY

A. MPC = 1.2 / 2 = 0.6

B. MPC = 1,6 / 2 = 0.8

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