passwella.
Menu

WAEC Economics 1988 Question 39

Question 39

National Income

The term marginal propensity to consume can best be explained as the

  1. A.desire to spend more income on consumption
  2. B.change in consumption as a percentage of the change in income
  3. C.average income regularly spend on consumption
  4. D.total expenditure on consumption
  5. E.inclination to spend only a little on consumption.
Show the answer and explanation

Answer: B (change in consumption as a percentage of the change in income)

Explanation

MPC = change in consumption ÷ change in income, i.e. the share of extra income that is spent.