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Define marginal propensity to consume (MPC). |
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Answer» Marginal Propensity to Consume: The marginal propensity to consume may be defined as the ratio of the change in the consumption to the change in income. Algebraically it may be expressed as under: MPC = ΔC/ ΔY Where, ΔC = Change in Consumption; ΔY = Change in Income MPC is positive but less than unity, 0 < ΔC/ ΔY < 1 |
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