Marginal propensity to save, Macroeconomics

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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:

742_MPS will be calculated as follows.png

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