Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

MPS is defined as :

Options:

Change in consumption per unit change in Income

Change in consumption per unit of Income

Change in savings per unit of Income

Change in savings per unit change in income

Correct Answer:

Change in savings per unit change in income

Explanation:

The correct answer is option (4) : Change in savings per unit change in income

MPS measures the change in savings (how much more is saved) when there's a unit change in income (how much more income is received). It reflects how much of an additional income someone chooses to save rather than spend.