MPC + MPS:
A) equals 1.
B) equals 0.75.
C) equals zero.
D) is always a negative number.

Name: MPC + MPS: A) equals 1. B) equals 0.75. C) equals zero. D) is always a negative number.
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Question

Quizplus · Accepted Answer

MPC (marginal propensity to consume) + MPS (marginal propensity to save) always add up to 1. This is because any extra income received will either be spent or saved, so the sum of the fractions representing these actions must equal one.