<P> The marginal propensity to consume is measured as the ratio of the change in consumption to the change in income , thus giving us a figure between 0 and 1 . The MPC can be more than one if the subject borrowed money or dissaved to finance expenditures higher than their income . The MPC can also be less than zero if an increase in income leads to a reduction in consumption ( which might occur if , for example , the increase in income makes it worthwhile to save up for a particular purchase ) . One minus the MPC equals the marginal propensity to save ( in a two sector closed economy ) , which is crucial to Keynesian economics and a key variable in determining the value of the multiplier . </P>
<P> The marginal propensity to consume is measured as the ratio of the change in consumption to the change in income , thus giving us a figure between 0 and 1 . The MPC can be more than one if the subject borrowed money or dissaved to finance expenditures higher than their income . The MPC can also be less than zero if an increase in income leads to a reduction in consumption ( which might occur if , for example , the increase in income makes it worthwhile to save up for a particular purchase ) . One minus the MPC equals the marginal propensity to save ( in a two sector closed economy ) , which is crucial to Keynesian economics and a key variable in determining the value of the multiplier . </P>
the marginal propensity to consume ( mpc ) is equal to the ratio of
the marginal propensity to consume ( mpc ) is equal to the ratio of
the change in consumption to the change in income
the change in consumption to the change in income