--%>

Value of MPC

Why can be value of MPC be not more than one?

Answer: The value of MPC will not be more than one since increment in consumption (ΔC) can’t be more than the equivalent increment in income (ΔY), that is, ΔC < ΔY.

   Related Questions in Macroeconomics

  • Q : Problem on slope of demand curve The

    The demand curve for DVD games is a straight line, therefore its slope: (1) Is constant, although price elasticity of demand drops/falls as output increases. (2) Price elasticity are both stable. (3) Is constant, although price elasticity of demand increases as the pr

  • Q : Effect of flood on demand Mold which

    Mold which destroyed the hamburger crop following a flood would be most probable to slash the demands for: (1) Fried chicken with mashed potatoes and gravy. (2) Soda pop and water. (3) Cucumbers, carrots, and egg plant. (4) Mustard and ketchup. (5) Tofu and sushi.

  • Q : GDP In calculating the GDP national

    In calculating the GDP national income accountants:

  • Q : Tax when consumer pay high price When a

    When a tax on goat cheese is completely paid by consumers via higher prices, then the tax has been: (i) alleviated. (ii) Forward shifted. (iii) Backward shifted. (iv) Actualized. (v) Randomized. Can someone help me in getting throu

  • Q : Purchasing and consumption of

    The usual household maximizes the utility by spending all its money to purchase and consume a combination of goods which yields: (1) Fundamental physiological requirements and customary wants. (2) Maximum status and the social prestige. (3) Complete satisfaction of al

  • Q : Define bank rate policy Define bank

    Define bank rate policy? How does it operate as a technique of credit control? Answer: Bank rate is the rate at which the central bank provides loans to the commerc

  • Q : Paradox of Value-total utility and

    I have a problem in economics on Paradox of Value-total utility and marginal utility. Please help me in the following question. Water is more precious than diamonds when measured by _____, however less valuable when measured by _____. (i) Total cost, total benefit. (i

  • Q : Problem on perfect replacements Imports

    Imports and American cars are much close however not perfect replacements. When the U.S. govt. tried to enhance American car sales by setting a price ceiling of P1 on imported cars: (i) The quantity of cars imported will drop/fall from Q0 to Q1. (ii)

  • Q : Fiscal measures to accurate

    Describe the fiscal measures to accurate the condition of deficient demand and excess demand. Answer: Fiscal measures are the government’s budgetary policy th

  • Q : Expenditure of money on party effects

    When you pay a straight A student in advance to write up your term paper and that person expends the money on a party and then, hung-over, can’t do a good job and hence you wind up with an F for submitting sloppily written gibberish, you encompass just suffered