Answer to Question #104575 in Macroeconomics for Sithabile

Question #104575

How to calculate marginal propensity to save?

Expert's answer

Marginal propensity to save – change in saving due to changes in income:

MPS= ΔS/Δy

where ΔS is the increase in savings; Δy the increase in income; MPS is the marginal propensity to save.

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