Question

Explain the relationship between MPS and MPC with the help of equations.

Answer 1

..

..MPC + MPS = 1

( MPC= ∆C / ∆Y

&

MPS = ∆S / ∆Y

=> ∆Y = ∆C + ∆ S

=> MPC+ MPS = ∆C/∆Y + ∆S/ ∆Y

= ∆C + ∆S /∆Y = ∆Y/∆Y = 1

MPS +MPC =1

Answer 2

Explain the relationship between MPS and MPC