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Marginal Propensity to Consume
The marginal propensity to consume (MPC) is a measure of the proportion of an increase in income that a person or household is likely to spend on consumption (goods and services) rather than save. It is calculated as the change in consumption divided by the change in income. For example, if a person's consumption increases by £100 when their income increases by £200, their MPC would be 0.5.
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