The MPC + MPS must always equal
A)The slope of the consumption function.
B)1.
C)The APC.
D)0.

Name: The MPC + MPS must always equal A)The slope of the consumption function. B)1. C)The APC. D)0.
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Question

Quizplus · Accepted Answer

The MPC (marginal propensity to consume) is the fraction of additional income that is spent on consumption, and the MPS (marginal propensity to save) is the fraction of additional income that is saved. Therefore, MPC + MPS must equal 1, since all additional income must either be consumed or saved.

The MPC + MPS Must Always Equal