marginal propensity to consume

marginal propensity to consume definition - business

marginal propensity to consume

The proportion of additional disposable income devoted to consumption spending rather than savings. For example, a person who spends $95 of a $100 monthly increase in disposable income has a marginal propensity to consume of 0.95.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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