The marginal propensity to save plus the marginal propensity to consume must equal:

Name: The marginal propensity to save plus the marginal propensity to consume must equal:
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Question

Quizplus · Accepted Answer

The marginal propensity to save is the portion of each additional unit of income that is saved, and the marginal propensity to consume is the portion that is spent. Since every unit of income must either be saved or spent, the sum of the two propensities must be equal to one (100%), making choice B the correct answer.

The Marginal Propensity to Save Plus the Marginal Propensity to Consume