Marginal Propensity to Consume | Vibepedia

The Marginal Propensity to Consume (MPC) is a fundamental concept in macroeconomics, quantifying the proportion of an increase in income that an individual or economy tends to spend rather than save. Developed by John Maynard Keynes, it's a crucial metric for understanding consumer behavior and designing effective fiscal policies. This principle helps economists predict the impact of income changes on aggregate demand and economic growth.