Practicing Success
Marginal prospensity to consume can be calculated as : |
$\frac{C}{Y}$ $\frac{Y}{C}$ $\frac{ΔC}{ΔY}$ $\frac{ΔY}{ΔC}$ |
$\frac{ΔC}{ΔY}$ |
The correct answer is option (3) : $\frac{ΔC}{ΔY}$ MPC represents the proportion of an additional increment of income that a consumer spends on consumption. It can be calculated as the change in consumption divided by the change in income. i.e $\frac{ΔC}{ΔY}$ |