If MPC=0.4 and change in income is 1000 crore , what will be change in – InterviewSolution

1.

If MPC=0.4 and change in income is 1000 crore , what will be change in savings

Answer»

EXPLANATION:

MPC+MPS = 1

0.4+ MPS = 1

MPS = 1 - 0.4

MPS = 0.6

MPS = marginal propensity SAVING

dy= Change in INCOME

DS = change in saving

MPS = ds/dy

0.6 = ds / 1000,00,00,000

ds = 0.6× 1000,00,00,000

ds = 600,00,00,000

Change in saving = 600,00,00,000

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