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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:
All of the following fiscal policies will contribute to increasing budget deficits except: A. cuts in aid to farmers. B. tax cuts. C. increases in defense expenditures. D. increase
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Is it true that government revenues are increased because of lower tax rates? Ans) It is true to a point. The Laffer curve determines that revenues enhance as the tax rates rise
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