At which point is MPC = MPS?
Answer & explanation
Correct answer: option 4
The correct answer is option 4: 0.5
The Marginal Propensity to Consume (MPC) and the Marginal Propensity to Save (MPS) are related and complementary. Their sum is always equal to .
MPC+MPS=1
Thus, both will be equal only when the value will be 0.5.