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SHORT ANSWER: Explain the relationship between the marginal propensity to consume and the marginal propensity to save. How do these two components affect GDP?

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Explain the relationship between the marginal propensity to consume and the marginal propensity to save.

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There is an inverse relationship between MPC and MPS. If MPC increases, MPS decreases and vice versa because both of these add to 100% or MPC+MPS= 100% and thus, decline ...

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Sheetal Jain, PGDM
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  • BComm, University of Delhi
  • Post Graduate Diploma in Management (Equivalent to MBA), All India Management Association
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