Economy, asked by Didwmsa, 1 year ago

Explain MPC=1 - MPS

Answers

Answered by PriyanshuKshatriya
1
Since MPS is measured as ratio of change in savings to change in income, its value lies between 0 and 1. Also, marginal propensity to save is opposite of marginal propensity to consume. Mathematically, in a closed economy, MPS + MPC = 1, since an increase in one unit of income will be either consumed or saved.
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