Definition of Marginal Propensity to Consume (MPC) is:

Correct option is B

(b) ΔC/ΔY

Sol.Marginal Propensity to Consume (MPC) is defined as the change in consumption (ΔC) due to a change in income (ΔY).

MPC=ΔCΔYMPC = \frac{\Delta C}{\Delta Y}MPC=ΔC/ΔY

Information Booster:

• MPC measures how much of an additional income is spent.
• MPS (Marginal Propensity to Save) is 1 - MPC.
• Keynesian Economics → Higher MPC leads to economic growth.

Additional Information:

• (a) C/Y → Incorrect, this is Average Propensity to Consume (APC).
• (c) S/Y → Incorrect, this is Average Propensity to Save (APS).
• (d) ΔS/ΔY → Incorrect, this is Marginal Propensity to Save (MPS).