In an economy, income generated is four times the increase in investment expenditure. Calculate the values of MPC and MPS.

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Solution

Given: K= 4
Since k =1/ MPS , so
=> 1/ MPS = 4
=> MPS = 1/4
=> MPS = 0.25
If MPS= 0.25, then MPC = 1- MPS = 1- 0.25 = 0.75.

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In an economy, income generated is four times the increase in investment expenditure. Calculate the values of MPC and MPS.

Given: K= 4 Since k =1/ MPS , so => 1/ MPS = 4 => MPS = 1/4 => MPS = 0.25 If MPS= 0.25, then MPC = 1- MPS = 1- 0.25 = 0.75.

Given: K= 4
Since k =1/ MPS , so
=> 1/ MPS = 4
=> MPS = 1/4
=> MPS = 0.25
If MPS= 0.25, then MPC = 1- MPS = 1- 0.25 = 0.75.