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

Question

Quizplus · Accepted Answer

MPC (Marginal Propensity to Consume) is the change in consumption due to a change in income. MPS (Marginal Propensity to Save) is the change in savings due to a change in income. Since every increase in income must either be consumed or saved, the sum of the MPC and MPS must equal 1. Therefore, option B is correct.

The MPC + MPS Must Always Equal