Generally speaking, the greater the MPS, the:
A) Smaller would be the increase in income which results from an increase in consumption spending
B) Larger would be the increase in income which results from an increase in consumption spending
C) Larger would be the increase in income which results from a decrease in consumption spending
D) Smaller would be the increase in income which results from a decrease in consumption spending

Question

Quizplus · Accepted Answer

The Marginal Propensity to Save (MPS) is the fraction of additional income that is saved rather than spent. A higher MPS means less of any additional income is spent, leading to a smaller increase in income from increased consumption spending.

Generally Speaking, the Greater the MPS, The