If the marginal propensity to consume is 0.2, the value of the marginal propensity to save is:
A) 2.
B) 5.
C) 1.25.
D) 0.8.

Name: If the marginal propensity to consume is 0.2, the value of the marginal propensity to save is: A) 2. B) 5. C) 1.25. D) 0.8.
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Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) + marginal propensity to save (MPS) must equal 1. Therefore, if MPC is 0.2, MPS must be 0.8 (1-0.2=0.8). Therefore, the correct answer is D, 0.8.

If the Marginal Propensity to Consume Is 0