In an economy with no taxes or imports,if the marginal propensity to consume increases,the marginal propensity to save will also increase.

Question

Quizplus · Accepted Answer

In an economy with no taxes or imports, the relationship between the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) is such that they always add up to 1. Therefore, if the MPC increases, the MPS must decrease because the sum of the two must always be 1. Hence, the statement is false.

In an Economy with No Taxes or Imports,if the Marginal