The marginal propensity to save is
A) real consumption/real disposable income.
B) real saving/real disposable income.
C) change in real consumption/change in real disposable income.
D) change in real saving/change in real disposable income.

Question

Quizplus · Accepted Answer

The marginal propensity to save (MPS) is the proportion of an increase in real disposable income that households save rather than spend on consumption. Mathematically, it is calculated as the change in real saving divided by the change in real disposable income. Therefore, choice D is correct.

The Marginal Propensity to Save Is