1 − MPC = MPS.

Name: 1 − MPC = MPS.
Brand: Quizplus
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Question

1 − MPC = MPS.

Quizplus · Accepted Answer

This statement is true. MPC (marginal propensity to consume) represents the fraction of additional income that is spent, while MPS (marginal propensity to save) represents the fraction of additional income that is saved. Therefore, if you subtract MPC from 1, you get the fraction of additional income that is saved, which is exactly what MPS represents. So 1 - MPC = MPS.