What is meant by the marginal propensity to save?
A)The ratio of change in savings to the corresponding change in income.
B)The ratio of change in income to the corresponding change in savings.
C)The ratio of change in savings to the corresponding change in consumption.
D)The portion of savings that is independent of the level of income.

Question

Quizplus · Accepted Answer

Marginal propensity to save refers to the ratio of change in savings to the corresponding change in income. It shows how much of an increase in income is saved rather than spent.

What Is Meant by the Marginal Propensity to Save