Practicing Success
If the entire additional income is saved then what will be the value of MPC? |
MPC will be rising MPC will be decreasing MPC will be 1 MPC will be 0 |
MPC will be 0 |
Marginal propensity to save is the ratio of change in savings to change in income. If the entire change in income is saved that means no additional consumption is done. Thus, we can say that MPC will be 0. The relationship between MPS and MPC is as follows: MPS + MPC = 1 |