Marginal Propensity to Save

Finance

Calculate MPS (Marginal Propensity to Save). Formula: MPS = ΔSavings / ΔIncome or MPS = 1 - MPC. Shows fraction of extra income saved vs consumed.

Formula

MPS = ΔSavings / ΔIncome. MPC + MPS = 1

Income +$1000B, Savings +$300B

Inputs
  • Change in Savings ($B): 300
  • Change in Income ($B): 1000

MPS = 0.3 (30% saved, 70% spent)

Frequently asked questions

MPS range?
0-1; developing nations typically 0.1-0.4, developed 0.1-0.3
Why matters?
Affects investment levels and economic growth