Which of the following is TRUE?
A)MPC - MPS = 1
B)MPC + MPS = 1
C)MPC * MPS = 1
D)MPC / MPS = 1

Name: Which of the following is TRUE? A)MPC - MPS = 1 B)MPC + MPS = 1 C)MPC * MPS = 1 D)MPC / MPS = 1
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The sum of the MPC (marginal propensity to consume) and the MPS (marginal propensity to save) always equal 1. This is because any increase in income can either be consumed or saved, so the combined value of MPC and MPS must account for all of the increase. Therefore, MPC + MPS = 1.

Which of the Following Is TRUE