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Economics
Marginal Propensity to Consume
The percentage of each extra dollar people spend instead of saving.
This number is key in Keynesian economics because it determines how powerful stimulus checks or tax cuts will be. Higher MPC means money circulates faster.It's like if you get a $100 bonus and spend $80 on new sneakers while saving $20 — your marginal propensity to consume is 80%.
Real world: During good times Americans might spend 90 cents of every extra dollar; during scary recessions they might save more and spend only 60 cents.
💡 The marginal propensity to consume shows why giving money to lower-income people usually boosts the economy more — they tend to spend it right away.