Since MPC + MPS = 1 (because every additional unit of income is either spent or saved), an increase in MPS must be accompanied by a decrease in MPC by an equal amount. The passage also explicitly states that higher MPS leads to a decrease in MPC.
If MPS in the economy increases, what will be the effect on MPC of economy ?
Verified 13 Jul 2026.
Supply increases
MPC decreases
MPC increases
MPC will neither increase nor decrease
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