The marginal propensity to consume is
-
Options A, B and C
- ฮC/ฮY
- The slope of the consumption function
- Coefficient c in the equation C = C + cYd
The correct answer is: A
Explanation
The marginal propensity to consume is the ratio of change in consumption to change in income. It is mathematically represented as: MPC = โC/โY and also the consumption function is represented as C = a +bYd ( C = C + cYd) where the b(c) is the MPC which ranges between 0 and 1. The slope of the consumption function is b or MPC