The sum of the MPC and the MPS is always:
A)greater than 1.
B)less than 1.
C)equal to 1.
D)equal to zero.
E)between 0 and 1.

Question

Quizplus · Accepted Answer

The MPC (marginal propensity to consume) and MPS (marginal propensity to save) always add up to 1. This is because any additional income a household receives is either spent or saved, so there are no other options for the use of that income. Therefore, the answer is C, equal to 1.

The Sum of the MPC and the MPS Is Always