What Is the Marginal Propensity to Consume?
The Marginal Propensity to Consume (MPC) is the fraction of an extra dollar of income that a person or economy spends on consumption rather than saving. It is a core concept in Keynesian economics used to estimate how changes in income ripple through overall economic activity.
The Formula
MPC = Change in Consumption ÷ Change in Income.
Since income is either spent or saved, the Marginal Propensity to Save (MPS) equals 1 − MPC. The spending multiplier, calculated as 1 ÷ MPS, estimates how much total economic output can change in response to an initial change in spending. This calculator is provided for general educational purposes only.
Last reviewed August 2026