MPC + MPS equals
- Zero
- Multiplier
-
One
- APS
The correct answer is: C
Explanation
MPC (Marginal Propensity to Consume) and MPS (Marginal Propensity to Save) are two concepts used in economics to describe how individuals allocate their income between consumption and saving.
MPC represents the proportion of an additional unit of income that is consumed rather than saved. MPS represents the proportion of an additional unit of income that is saved rather than consumed. Therefore, MPC + MPS represents the total proportion of an additional unit of income that is either consumed or saved.
The sum of MPC and MPS is always equal to one, which means that every additional unit of income is either consumed o saved in its entirety. This is because income