Science

Math

Humanities

... and beyond

Socratic Meta
Featured Answers

Topics

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#

i.investopedia.com

Related questions

See all questions in Multiplier and crowding-out effects

Impact of this question

3282 views around the world

You can reuse this answer
Creative Commons License