If the marginal propensity to consume is 0.6, the marginal propensity to save is
A)0.4.
B)0).6.
C)1.
D)1.5.
E)0.8.

Name: If the marginal propensity to consume is 0.6, the marginal propensity to save is A)0.4. B)0).6. C)1. D)1.5. E)0.8.
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Question

Quizplus · Accepted Answer

The marginal propensity to save (MPS) is simply the inverse of the marginal propensity to consume (MPC). Thus, MPS = 1 - MPC. If MPC is 0.6, then MPS is 1 - 0.6 = 0.4. Therefore, the best choice is A.

If the Marginal Propensity to Consume Is 0