Asked by
Nabil Boulos
on Oct 13, 2024
Verified
If the MPC is .85 and the APC is .75,the MPS is
A) .15.
B) .25.
C) .75.
D) .85.
E) Impossible to determine.
MPC
MPC, or Marginal Propensity to Consume, is the proportion of additional income that an individual spends on consumption.
APC
Average Propensity to Consume, the fraction of income that households spend on consumption as opposed to saving.
MPS
An acronym that can stand for multiple financial and economic terms, such as Marginal Propensity to Save, which indicates the fraction of additional income that a household saves.
- Acquire knowledge on the concepts of marginal propensity to consume (MPC) and save (MPS).
- Compute the average tendencies to consume (APC) and to save (APS) from available data on disposable income and consumption.
Verified Answer
RR
Learning Objectives
- Acquire knowledge on the concepts of marginal propensity to consume (MPC) and save (MPS).
- Compute the average tendencies to consume (APC) and to save (APS) from available data on disposable income and consumption.