One minus the marginal propensity to consume equals
A) the average propensity to consume.
B) the multiplier.
C) the marginal propensity to save.
D) the expected rate of return.
E) disposable income.

Question

Quizplus · Accepted Answer

By definition, the marginal propensity to consume (MPC) is the fraction of a change in income that is spent on consumption. Therefore, one minus the MPC would represent the fraction of a change in income that is saved, which is known as the marginal propensity to save (MPS). Therefore, the correct answer is C.

One Minus the Marginal Propensity to Consume Equals