Question

The rate of increase in ex-ante consumption due to a unit increment in income is called _________?

• A. marginal propensity to consume
• B. average propensity to save
• C. average propensity to consume
• D. marginal propensity to save

Answer 1

Answer:

A. marginal propensity to consume

Marginal propensity to consume (MPC) is the ratio of change in consumption to change in income, indicating the proportion of additional income spent on consumption