1) What happens to the Marginal Propensity to Consume (MPC) if the change in consumption is greater than the change in income? 2) If a person’s income increases by $1,000 and they save an additional $200, what is their MPS? 3) if the MPC in an economy is 0.75, what should the MPS be? 4) If the change in disposable income (∆Yd) is $10,000 and the change in consumption (∆C) is $7,000, what is the MPC? 5) Identify the formula correctly represents the Marginal Propensity to Save (MPS)? 6) What does a higher MPS indicate about a person’s financial behaviour? 7) True or False: The sum of MPC and MPS always equals 1. 8) True or False: A high MPC value indicates strong consumer confidence and a tendency to save more. 9) Identify the formula correctly represents the Marginal Propensity to Save (MPS)? 10) Calculate the APC if Disposable Income (Y) = $50,000 and Total Consumption (C) =$45,000

MPC and MPS

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