marginal propensity to consume(redirected from Propensity-to-Consume)
Marginal Propensity to Consume
In Keynesian economics, the amount of a person's increase in income spent on goods and services as opposed to saved. It is measured as a ratio of a change in consumption to a change in income. For example, if one receives a $5,000 raise in salary and spends $3,000, the MPC is 0.6. Factors affecting the MPC include interest rates and the relative expense of goods and services. See also: Marginal propensity to save.
marginal propensity to consume (MPC)the fraction of any change in NATIONAL INCOME that is spent on consumption: