The marginal propensity to consume (MPC) A) shows the percentage of r
The marginal propensity to consume (MPC)
A) shows the percentage of real disposable income consumed at each level of income.
B) shows how much of an extra dollar of real disposable income is spent.
C) shows how much real disposable income changes when consumption falls.
D) is greater than 1 only if the marginal propensity to save is greater than 1.
ANSWER
B
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