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Marginal Propensity to save (MPS) is the ratio of change in total saving to change in total disposable income.Symbolically,
MPS = ?S/?Y
For example, total saving in an economy increase from $ 2,000 crore to $ 5,000 crore, and total disposable income rises from $ 10,000 crore to $ 20,000 crore. Then, the MPS will be calculated as follows:
You are given the following information about an economy: Gross Investment = 40 Govt. purchases of goods & service =
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Why is quantitative easing used during liquidity trap when it lowers interest rates too?
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