--%>

Determine the marginal propensity to save

If disposable income increases from Rs. 1,000 to Rs. 1,100, savings increase by Rs. 30. Determine the marginal propensity to save and marginal propensity to consume?

E

Expert

Verified

ΔY = 1,100 -1,000 = 100, ΔS = 30, MPS = ΔS/ΔY = 30/100 = 0.30

1- MPS = MPC

That is, 1 - 0.30 = 0.70 = MPC.

   Related Questions in Macroeconomics

  • Q : Policy proposals influencing market for

    How would your policy proposals influence the market for parking?

  • Q : What is Supply schedule What is Supply

    What is Supply schedule and how it is related to supply curve?

  • Q : Expanding consumption of a good I have

    I have a problem in economics on Expanding consumption of a good. Please help me in the following question. Your consumption of a good tends to expand if it’s: (i) Relative marginal utility surpasses its relative price. (ii) Total utility is les

  • Q : Equilibrium The equilibrium interest

    The equilibrium interest rate is determined

  • Q : Principles of macroeconomics What are

    What are the “powers of the Federal Reserve

  • Q : Relevance of matter-SWOT analysis

    Relevance of matter: Relevance of matter is very much important while choosing any goals. Are the goals relevant to the vision of the company? A goal of having maximum number of customers seems fantabulous, however at the same time bank needs to make

  • Q : Receipts from taxes Why are receipts

    Why are receipts from taxes classified as revenue receipts? Answer: Receipts from taxes are classified as revenue receipts since they do not build liabilities nor r

  • Q : Subjective worth of Consumer Surplus

    The consumer gains from being capable to purchase at a single price rather than paying all that the particular quantity of the good is subjectively worth are: (i) Adverse selections. (ii) Market exploitation. (iii) Consumer surpluses. (iv) Moral hazards.

  • Q : Would inflation targeting be a good

    Question: Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment?

    Q : Definition of surplus Definition of

    Definition of surplus: It is a condition in which quantity supplied is more than quantity demanded. To remove the surplus, producers will minimize the price till the market reaches to equilibrium.