Write Short notes on: 5) Marginal Propensity to Consume

Write Short notes on:

5) Marginal Propensity to Consume

Answer: Marginal propensity to consume expresses the propensity to consume in proportionate terms. It refers to the ratio of change in the consumption expenditure to the change in disposable income. Algebraically,
MPC = ∆C / ∆Y.

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