The marginal propensity to save is the amount of additional savings associated with each one-dollar increase in income multiplied by the increase in income.

Question

Quizplus · Accepted Answer

This is the correct definition of the marginal propensity to save. It measures the change in saving that results from a change in income, and it is expressed as a ratio or percentage of the change in saving to the change in income. So, the formula for calculating the marginal propensity to save is change in saving divided by change in income.

The Marginal Propensity to Save Is the Amount of Additional