Answer to Question #50383 in Macroeconomics for abdulla sabit

Question

"MPC of poor people is higher than that of the rich people"-Explain the statement.

Answer 1

"MPCof poor people is higher than that of the rich people"-Explain the
statement.
Poor people spent much more percent of their income on consumption, thanthe rich people. At the same time rich people spent less percent of their income on consumption, despite they buy moreexpensive food, and their average propensity to save is higher than that of a
person with a lower income. It is because people have almost the same cost of the
basic human needs, but it amount to a bigger fraction of poor people income,
than of rich people income