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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.