Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

At which point is MPC = MPS?

Options:

0

1

2

0.5

Correct Answer:

0.5

Explanation:

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.