For an economy, savings function is S = -50 +0.5 Y. Then what will be the value of MPC?

0.5

The correct answer is Option 1: 0.5

To find the MPC, we first need to understand the Marginal Propensity to Save (MPS), which is the coefficient of Y in the savings function.

In this case, the MPS is 0.5.

Since MPC and MPS are complementary and their sum is always 1, we can find the MPC as follows:

MPC=1−MPS

MPC = 1 -0. 50

        = 0.50