Praxis II Citizenship

Answer: C - A consumer’s willingness to increase his spending as his income increases is called his marginal propensity to consume. More specifically, it is the specific portion of each extra dollar earned that the consumer is willing to allocate to spending. For example, if Frank gets a raise of $100 a month, and he increases his monthly budget by $50, his marginal propensity to consume is .5 or 50 cents.