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If the marginal propensity to consume is 0.8, What is the marginal propensity to save?


label Economics
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I need to find the marginal propensity to save from the information provided of MPC=0.8

Nov 20th, 2017

If the marginal propensity to consume(MPC) = 0.8 or 80%

Then marginal propensity to save (MPS) = 1.00 - 0.80 or 100 - 80

                                                                   =0.2 or 20%

The marginal propensity to save is the portion of extra income that consumers save. The marginal propensity to save is typically smaller than the marginal propensity to consume, because people spend most of the extra income they earn.

Apr 11th, 2015

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