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Slope of Consumption curve is denoted by : |
Average Propensity to Consume Average Propensity to Save Marginal Propensity to Consume Marginal Propensity to Save |
Marginal Propensity to Consume |
The slope of the consumption curve is denoted by Marginal Propensity to Consume (MPC).The slope equals the change in consumption divided by the change in disposable personal income. The ratio of the change in consumption (ΔC) to the change in disposable personal income (ΔY d) is the marginal propensity to consume (MPC).
APC is the total consumption divided by total income. It is the average height of the consumption curve. APS is the total saving divided by total income. It is the difference between 1 and APC. MPS is the change in saving divided by the change in income. It is the slope of the saving curve at a given point. |
