Question #246610

Nthabiseng’s monthly disposable income increases from R3 000 to R3 400. As a result, her monthly savings increase from R400 to R560. This implies that her marginal propensity to consume is …



1
Expert's answer
2021-10-05T09:21:03-0400
MPS=ΔSΔYMPS=\frac{\varDelta S}{\varDelta Y}

MPS=160400×100=40MPS=\frac{160}{400}\times100=40

The marginal propensity to consume is increased by 40%.


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