What is marginal propensity to consume and marginal propensity to save?

Asked by Topperlearning User | 18th Apr, 2016, 02:19: PM

Expert Answer:

Marginal propensity to consume is the ratio of change in consumption (∆C) to change in income (∆Y).

MPC = ∆C/∆Y

Marginal propensity to save is the ratio of change in saving ((∆S) to change in income (∆Y).

MPS = ∆S/∆Y

Answered by  | 18th Apr, 2016, 04:19: PM