Economics · Macroeconomics - Keynesian Multiplier
If the Marginal Propensity to Consume (MPC) is 0.8, what does it signify?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Consumers spend 80% of any incremental income✓
- 2Consumers save 80% of their total income
- 3Consumers spend only 20% of any incremental income
- 4Consumers save 0.2% of their total income
Correct answer
Consumers spend 80% of any incremental income
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