Question

An economy is in equilibrium. From the following data, calculate the marginal propensity to save :

(a) Income= Rs.10,000

(b) Autonomous consumption = 500

(c) Consumption expenditure = Rs.8,000

Answer 1

Given,

Income(Y)=Rs.10,000

Hence, the Marginal Propensity to Save (s) is 0.25.