If income changes from 3000 to 4500 and saving changes from 600 to 900, then calculate MPS?

0.2

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0.1

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0.2 for time period 1 and 0.1 for time period 2.

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0.1 for time period 1 and 0.2 for time period 2.

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Solution

The correct option is A 0.2
MPS = (Change in savings)/(Change in Income),
So,
MPS = (600-900)/(4500-3000)
= 300/1500
= 0.2

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