Marginal Propensity to Consume

This refers to the economic ratio of the change in consumption to a change in income.

Marginal Propensity to Consume (MPC) recognises that changing disposable income results in changing spending, with the MPC reflecting the ratio of spending to saving likely when disposable income levels change.

Marginal Propensity to Consume is a term normally found in business economics and financial management.

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