The ratio of total additional planned savings in an

Solution

·  Marginal propensity to save (mps) is a fraction which gives an idea of what proportion of the total additional income of the economy people wish to save as a whole. It gives us the ratio of total additional planned savings in an economy to the total additional income of the economy). · Subtracting the mps from 1, we get the marginal propensity to consume (mpc), which, in a similar way, is the fraction of total additional income that people use for consumption.