📝 Multiple Choice Question
Economics
In the context of a consumption function for an economy, if MPC = 0.6, then what is the likely value of MPS?
A
0.16
B
0.36
C
-0.6
D
0.4
Explanation
Because any additional unit of income must mathematically be either consumed or saved, the Marginal Propensity to Consume (MPC) and Marginal Propensity to Save (MPS) always equal 1 (0.6 + 0.4 = 1).
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