Which of the following is true?
A) APC + MPS = 1
B) MPC + MPS = 1
C) 1 + APC = APS
D) APC - APS = 1

Question

Quizplus · Accepted Answer

MPC (marginal propensity to consume) is the change in consumption resulting from a change in income, while MPS (marginal propensity to save) is the change in savings resulting from a change in income. Since all income is either consumed or saved, it follows that MPC + MPS = 1. Option B fits this equation.

Which of the Following Is True