The MPC and MPS
A) can sum to anything greater than 0.
B) sum to 1.
C) sum to 100.
D) each are usually less than .5.

Question

Quizplus · Accepted Answer

The MPC (marginal propensity to consume) and MPS (marginal propensity to save) represent the proportion of a change in income that is spent or saved, respectively. Since all income must either be consumed or saved, the sum of the MPC and MPS must be equal to 1. Therefore, choice B is the best answer.