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The Saving Function
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The Saving Function
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15. Income and Consumption / The Saving Function / Problem 1
Problem 1
How do the marginal propensity to save (MPS) and marginal propensity to consume (MPC) complement each other?
A
They sum to 0, indicating no change in disposable income allocation.
B
They sum to 1, indicating the total change in disposable income allocation.
C
They are unrelated, indicating independent changes in disposable income allocation.
D
They are equal, indicating identical changes in disposable income allocation.
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