MPS (Marginal Propensity to Save) Calculator

Formula

The formula to calculate the Marginal Propensity to Save (MPS) is:

\[ MPS = \frac{dS}{dI} \]

Where:

$ MPS $ is the Marginal Propensity to Save
$ dS $ is the change in savings ($)
$ dI $ is the change in income ($)

What is MPS?

MPS, known as Marginal Propensity to Save, is a measure of how much extra money a person saves when they receive an increase in income. It is the proportion of any additional income that is saved rather than spent. The higher the MPS, the more likely a person is to save additional income rather than spend it.

Example Calculation

Let's assume the following values:

Change in Savings (dS) = $200
Change in Income (dI) = $1,000

Using the formula to calculate MPS:

\[ MPS = \frac{200}{1000} = 0.20 \]

The Marginal Propensity to Save (MPS) is 0.20.