If MPC is 40 per cent MPS will be ........

If MPC is 40 per cent, MPS will be

70 percent

60 percent

50 percent

40 percent

- MPC stands for Marginal Propensity to Consume. It represents the fraction of additional income that a person will spend on consumption.

- MPS stands for Marginal Propensity to Save. It's the fraction of additional income that a person will save rather than spend.

- MPC and MPS are complementary, meaning that they add up to 1.

- Given that MPC is 40%, MPS would be calculated as:

MPS = 1 - MPC = 1 - 0.40 = 0.60 or 60%.

- Let's evaluate the options:

- Option 1: 70 percent - Incorrect as 70% + 40% does not equal 100%.

- Option 2: 60 percent - Correct as 60% + 40% equals 100%.

- Option 3: 50 percent - Incorrect as 50% + 40% does not equal 100%.

- Option 4: 40 percent - Incorrect as 40% of both does not sum to 100%.

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