in economics, the marginal propensity to consume (mpc) is a measurement that can put induced consumption into numbers. induced consumption is the idea that an increase in personal consumer spending (consumption) happens with an increase in disposable income (income after taxes and transfers). the proportion of disposable income which people spend on consumption is called the propensity to consume. mpc is the proportion of more income that a person spends. for example, if a household earns one extra dollar of disposable income, and the marginal propensity to consume is 0.65, then the household will spend 65 cents and save 35 cents of that dollar. obviously, the household cannot spend "more" than the extra dollar (without borrowing).