The arithmetic value of 1 - MPC equals

Question

Quizplus · Accepted Answer

MPC or Marginal Propensity to Consume is the change in consumer spending resulting from a change in income.

MPS or Marginal Propensity to Save is the change in household saving resulting from a change in income.

1-MPC is the Marginal Propensity to Save, as it represents the portion of income not consumed but saved instead. Therefore, the arithmetic value of 1 - MPC is MPS.

APC or Average Propensity to Consume is the ratio of consumption expenditure to income, while APS or Average Propensity to Save is the ratio of savings to income. NNP or Net National Product is the total value of goods and services produced by a country's citizens and businesses within a given period, minus the depreciation of capital.

The Arithmetic Value of 1 - MPC Equals