-In the above table, the marginal propensity to save is
A) 0.8.
B) 0.6.
C) 0.2.
D) 0.4.

Question

-In the above table, the marginal propensity to save is
A) 0.8. 
B) 0.6. 
C) 0.2. 
D) 0.4.

Quizplus · Accepted Answer

The marginal propensity to save (MPS) is calculated as the change in savings divided by the change in income. Given the absence of specific data in the question, MPS is generally defined as 1 minus the marginal propensity to consume (MPC). If MPC is not provided, MPS is often considered to be the complement to it, assuming MPC + MPS = 1. Without specific numbers, a common assumption is an MPS of 0.2, reflecting a scenario where if not spent (MPC), the remainder is saved (MPS).

-In the Above Table, the Marginal Propensity to Save Is