Question Details

Detailed explanation and options for the selected question.

What is meant by “marginal propensity to consume”?

A. The total amount consumed out of total income
B. The fraction of additional income spent on consumption
C. The amount saved from total income
D. The proportion of income spent on necessities

Explanation:

Marginal propensity to consume is the fraction of additional income that is spent on consumption. It differs from total or necessity-based spending.

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