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What is the mathematical formula for the marginal propensity to consume?

1 Answer

Jan 10, 2016

#"MPC"=(Delta"C")/(Delta"Y")#

Explanation:

#"MPC"=(Delta"C")/(Delta"Y")#

#Delta"C"# is the change in consumption.
#Delta"Y"# is the change in income.

If consumption increases by #$1.60# for every #$2.00# increase in income, the marginal propensity to consume is

#1.6/2=0.8#

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