Marginal Propensity to consume + Marginal Propensity to Save is always equal to Group of answer choicesidentical01varies
Question
Solution 1
The sum of Marginal Propensity to Consume (MPC) and Marginal Propensity to Save (MPS) is always equal to 1.
Here's why:
- Marginal Propensity to Consume (MPC) is the increase in consumer spending due to an increase in income. This is how much of additional income will be used for consumption.
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