If you know that an increase in a household’s disposable income from $35,000 to $45,000 leads to an increase in consumption from $30,000 to $38,000, then you can conclude that the:

A.Slope of the consumption schedule is .75
B.Average propensity to consume is .8
C.Marginal propensity to save is .25
D.Marginal propensity to consume is .8

ANSWEWR:

D.Marginal propensity to consume is .8