MPC Calculator — Marginal Propensity to Consume
The Marginal Propensity to Consume (MPC) measures how much of each additional dollar of income a household or economy channels into spending. Enter income and consumption for two periods and get MPC, MPS, and the Keynesian fiscal multiplier.
Fraction of each additional dollar of income spent on consumption
- 1
Change in income (ΔY)
Y₂ − Y₁ = 55 000 − 50 000 = 5000 - 2
Change in consumption (ΔC)
C₂ − C₁ = 46 000 − 42 000 = 4000 - 3
Marginal Propensity to Consume
ΔC ÷ ΔY = 4000 ÷ 5000 = 0,8000Fraction of each additional unit of income that is spent on consumption.
Jak działa ten kalkulator?
MPC = ΔC ÷ ΔY — the fraction of extra income spent on consumption. If income rises by $5,000 and spending rises by $4,000, MPC = 0.8 and MPS = 0.2. The Keynesian fiscal multiplier is 1 ÷ MPS = 5, meaning each dollar of new spending triggers $5 of total economic activity (in the simple model without taxes or imports).
Wzór
How this is calculated
When income rises by ΔY, some portion is spent (ΔC) and the rest is saved. The Marginal Propensity to Consume is simply that spending fraction: MPC = ΔC ÷ ΔY. Because every extra dollar must be either consumed or saved, MPS = 1 − MPC always holds. If MPC = 0.8, for example, each new dollar triggers $0.80 of spending and $0.20 of saving.
The fiscal multiplier follows directly: because the $0.80 spent becomes income for someone else who then spends 80% of it again, a one-dollar increase in government spending or investment ripples through the economy as Multiplier = 1 ÷ MPS = 1 ÷ (1 − MPC). With MPC = 0.8, the multiplier is 5 — meaning each dollar of initial spending ultimately generates $5 of aggregate demand (ignoring taxes, imports, and other leakages).
In practice, MPC varies by income level, household characteristics, and economic conditions. Low-income households tend to have higher MPCs (close to 1) because they spend most of any extra income on necessities, while wealthier households save a larger share. The simple Keynesian model also ignores taxes, imports, and monetary-policy offsets that reduce real-world multipliers well below the theoretical value.
Najczęściej zadawane pytania
MPC generally ranges from 0.6 to 0.9 for most households. Lower-income groups often have MPCs near 1 (they spend almost every extra dollar), while higher-income groups have lower MPCs. In aggregate, the US MPC is estimated around 0.7–0.8 in most Keynesian models.
Yes. If a household spends more than it earns from an income increase — for example by drawing down savings or taking credit — the MPC exceeds 1. This is unusual at the aggregate level but can occur at the household level during financial stress. MPC cannot be negative.
Each round of spending becomes income for someone else, who then spends their MPC share of it. A higher MPC means more of each income round flows back as spending, creating more rounds of amplification. With MPC = 0.9 the multiplier is 10; with MPC = 0.5 it is only 2. Real-world multipliers are smaller because of taxes, imports, and other leakages.
Znany również jako
TG we-Calculate Editorial Team. (2026). MPC Calculator — Marginal Propensity to Consume [Online calculator]. TG we-Calculate. https://we-calculate.com/pl/calculator/mpc-calculator
TG we-Calculate Editorial Team. "MPC Calculator — Marginal Propensity to Consume." TG we-Calculate. 2026. https://we-calculate.com/pl/calculator/mpc-calculator.
TG we-Calculate Editorial Team, "MPC Calculator — Marginal Propensity to Consume," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/pl/calculator/mpc-calculator
@misc{wecalculate_mpc_calculator, title = {MPC Calculator — Marginal Propensity to Consume}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/pl/calculator/mpc-calculator}}, year = {2026}, note = {TG we-Calculate} }
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