The marginal propensity to save (MPS) is ?
Correct answer: B. the fraction of a change in income that is saved
- A. the average amount of income that is saved
- B. the fraction of a change in income that is saved
- C. the ratio of saving to income
- D. the ratio of income to saving
Explanation
MPS measures the part of an additional unit of income that is saved, so it is the change in saving divided by the change in income. The ratio of total saving to total income is the average propensity to save.
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