Question 10 of 20 O Disposable Income 200 billion 400 billio

Question 10 (of 20 O. Disposable Income $200 billion 400 billion 600 billiorn 800 billion Consumption $200 billion 300 billion 400 billion 500 billion 600 billion How much is the marginal propensity to con sume when disposable income rises from $600 bilion to $800 billion? O 65 O 75 O .85 O Type here to search

Solution

MPC = Change in Consumption/Change in Income

Change in Consumption = 600 - 500 = 100 billion

Change in income = 800 - 600 = 200 billion

MPC = 100 billion / 200 billion = 0.5

Answer is 0.5