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Answer to Question #134022 in Macroeconomics for Valerie
Question #134022
Which of the following statements is correct about the marginal propensity to consume (MPC)?
A. MPC – marginal propensity to save = 1
B. MPC is equal to or greater than one at all income levels.
C. MPC is greater than zero but less than one.
D. MPC may be negative.
A. MPC – marginal propensity to save = 1
B. MPC is equal to or greater than one at all income levels.
C. MPC is greater than zero but less than one.
D. MPC may be negative.
Expert's answer
(C) MPC is greater then 0 and less then 1. this is property of MPC that is lies between 0 to 1
so option C is correct
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