If MPS is 0 6 what will be S when income increases by Rs 100 ........

If MPS is 0.6,what will be ?S when income increases by Rs.100 ?

Rs. 60

Rs. 50

Rs. 40

Rs.70

- MPS (Marginal Propensity to Save) is the fraction of an increase in income that is saved instead of spent.

- If MPS is 0.6, it means 60% of any additional income is saved.

- An increase in income of Rs. 100 implies savings of 0.6 * 100 = Rs. 60.

- Option 1: Rs. 60 aligns with this calculation.

- Option 2: Rs. 50 is incorrect because it reflects a lower saving percentage.

- Option 3: Rs. 40 does not correspond to the given MPS of 0.6.

- Option 4: Rs. 70 exceeds the saving calculated with MPS 0.6.

Option 1 is the correct answer.

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