1.

State the diffrence between MPC and MPS ? in points

Answer»

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√ Marginal propensity to consume (MPC)

• It refers to the RATIO of CHANGE in consumption and the change in total INCOME..

• It can never be 0 due to the survival autonomous consumption occurs always...

• MPC = ∆C / ∆Y

√ Marginal propensity to save (MPS)

•It is the ratio of change in saving and change in total income...

• It can never be less than 0 as change in saving can't be negative...

• MPS = ∆S/∆Y...

Thank you



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