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Question
When the value of average propensity to save is negative, the value of marginal propensity to save will also be negative.
True/False.
True/False.
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Solution
False. MPS i.e. Marginal Propensity to Save cannot be more than one
or less than zero as it is percentage change in savings when
there is some change in the level of income which cannot be more than or less than the
change in income.
MPS i.e. Marginal Propensity to Save cannot be more than one or less than zero as it is percentage change in savings when there is some change in the level of income which cannot be more than or less than the change in income.
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