Question

What is Marginal Propensity to consume? How is it related to Marginal Propensity to Save?
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Answer 1

Answer:

Marginal Propensity to Save

As saving is a complement of consumption, the MPS reflects key aspects of a household's activity and its consumption habits. It is expressed as a percentage. For example, if the marginal propensity to save is 10%, it means that out of each additional dollar earned, 10 cents is saved