Question

the multiplier is reciprocal of marginal propensity to save ,dicuss​

Answer 1

The marginal propensity to save or MPS is the fraction of an steady rise in income which is not used for expenses but rather used for saving.

Explanation:

• The MPS reflects the fundamental law of psychology.
• The MPS is a fractional decrease in the savings that is a outcome of  a decrease in income.
• The marginal propensity to save is also an important factor of variable in calculating the value of the multiplier.
• MPS can be calculated as a change in the savings divided by the change in the income level.

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Marginal propensity to save

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