BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -MPS is most often used in Keynesian economic theory. It is calculated simply by dividing the change in savings observed given a change in income: MPS = S/Y.

Detailed explanation-2: -The average propensity to save equals the ratio of total saving to total income; the marginal propensity to save equals the ratio of a change in saving to a change in income.

Detailed explanation-3: -Typically, the higher the income, the higher the MPS, because as wealth increases, so does the ability to satisfy needs and wants, and so each additional dollar is less likely to go toward additional spending.

Detailed explanation-4: -The ratio of total consumption to total income is known as the average propensity to consume; an increase in consumption caused by an addition to income divided by that increase in income is known as the marginal propensity to consume.

Detailed explanation-5: -Marginal Propensity to Save or MPS is a concept propounded in Keynesian macroeconomic theory, which refers to the proportion of any additional income that is saved by a consumer rather than utilising it for spending on consumption of goods and services.