The MPS and MPC always add up to 1 because all consumer income that is not spent on goods and services must be saved.

Name: The MPS and MPC always add up to 1 because all consumer income that is not spent on goods and services must be saved.
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Question

Quizplus · Accepted Answer

MPS (Marginal Propensity to Save) and MPC (Marginal Propensity to Consume) always add up to 1 because they represent the two possible uses of income: either it is spent (consumed) or saved, with no other options available.

The MPS and MPC Always Add Up to 1 Because