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Andrej [43]
2 years ago
7

Suppose you get $500 for your birthday. you spend $400 and save the remaining $100. hence, the marginal propensity to save or mp

s is equal to:_______
Business
1 answer:
Makovka662 [10]2 years ago
5 0

Assuming that you received $500 for your birthday, spent $400 of it, and saved the remaining $20. There are 20 MPs, or marginal propensities to save.

MPS= change in savings/change in income. A change in income of $500 changes savings by $20

<h3 /><h3>Why Do People Have a Marginal Propensity to Consume?</h3>
  • The opposite of MPS is the marginal propensity to consume (MPC). The link between income and consumption is quantified with the aid of MPC.
  • By dividing the change in spending by the change in income, one can determine their marginal propensity to consume.
  • In order to calculate how much spending rises for every dollar of increased income, MPC measures this relationship.

To learn about more Marginal propensity, visit:

brainly.com/question/13957387

#SPJ4

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C

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E. None of these answer choices are correct.

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