To boost our economy,a complex of policies must be implemented to increase people’s marginal rate of consumption and decrease marginal rate of imports as well as cutting tax.

Microcosmic Base for Promoting Domestic Demand under the Global Financial Crisis——A Study on MPC of China Inhabitants

This article takes an empirical study on the trend of Chinese urban resident s MPC(marginal propensity to consume) of 1978-2005,with the method of gradient regression.

This paper points out that under the conditions of new economy the co nsumption takes immaterial one to heart, therefore the MPC (marginal propensity to consume) goes up, and several positive data proves this conclusion, and expla ins the sustainable growth and growth recession of the new economy and some othe r problems oc the development of the new economy.

Appraisals of the Methods of Marginal Propensity to Consume;

Chinese urban residents′ consumption structure during ten vears′ period is andlysed,the Engel coefficient is measured and by using extended linear expenditure system,an analysis and forecast of the marginal propensity to consume along with the income elasticity of demand are pro.

Further more some political suggestions were proposed in two aspects,which are increasing the permanent income and raising the relevant marginal propensity to consume,to improve farmer s consume.