If the marginal propensity to save is small, it will:

Name: If the marginal propensity to save is small, it will:
Brand: Quizplus
Rating: 4.9 (46 reviews)

Question

Quizplus · Accepted Answer

The marginal propensity to save (MPS) is inversely related to the marginal propensity to consume (MPC). A smaller MPS means a larger MPC, which leads to a larger multiplier effect in Keynesian economics. The multiplier is calculated as 1/(1-MPC), so as MPC increases (or MPS decreases), the multiplier becomes larger.

If the Marginal Propensity to Save Is Small, It Will