Home › Bihar Board Class 12 (Arts) › Economics › Determination of Income and Employment › The marginal propensity to consume is the ratio …
The marginal propensity to consume is the ratio of what?
AChange in saving over income change
BTotal consumption over total income
CIncome change over consumption change
DConsumption change over income change
Answer & Solution
Correct answer: D. Consumption change over income change
MPC measures the rate at which consumption changes as income changes, that is change in C divided by change in Y.
Related questions
With a government, which term simply adds to the autonomous part of demand?How does government spending G affect aggregate demand?With A = 50, MPS = 0.2 and Y = 4000 crore, what is ex ante aggregate demand?Equilibrium output also fixes which variable, given other factors of production?The effective demand principle assumes aggregate supply is what at the fixed price?Under the effective demand principle, what determines aggregate output?Excess demand in the economy leads to what in the long run?What does deficient demand lead to in the long run?