"Economists are generally concerned about the rising Marginal Propensi – InterviewSolution

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1.	"Economists are generally concerned about the rising Marginal Propensity to Save (MPS) in an economy”. Explain why?
Answer» Since the sum of MPC and MPS is unity. Any increase in Marginal Propensity to save (MPS) would directly lead to decrease in Marginal Propensity to Consume (MPS). This means that it may lead to lesser proportion of the additional income going for consumption which is a vital factor of Aggregate Demand Expenditure. This may further lead to fall in equilibrium level of income in the economy.

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