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Define marginal propensity to consume. How is it different from marginal propensity to save?

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Marginal Propensity to Consume refers to the ratio of change in consumption to change in income.

Symbolically,

\(MPC =\frac {Δc}{ΔY}\)

where ΔC refers to change in total consumption ΔY refers to change in income.

Marginal Propensity to Save, on the other hand, is the ratio of the change in total desired saving to change in total income.

Symbolically,

\(MPC =\frac {Δc}{ΔY}\)

where ΔS refers to change in total desired saving ΔY refers to a change in income.

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