The marginal propensity to consume tells us by how much consumption expenditure changes when disposable income changes.
In economics, the marginal propensity to consume (MPC) is defined as the proportion of an aggregate raise in pay that a consumer spends on the consumption of goods and services, as opposed to saving it.
Key Takeaways. The marginal propensity to save (MPS) is the portion of each extra dollar of a household's income that's saved. MPC is the portion of each extra dollar of a household's income that is consumed or spent.
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