Question

If MPS is 0.6, what will be $\Delta S$ when income increases by Rs 100?

• A. Rs 60
• B. Rs 50
• C. Rs 40
• D. Rs 70

Answer 1

The correct option is A

Rs 60

MPS = $\frac{\Delta S}{\Delta Y}$

$\Delta S$ = MPS * $\Delta Y$

= 0.6 * 100

= Rs. 60