MPC and MPS have an inverse relationship. When MPC increases, MPS decreases and when MPC decreases MPS increases. The relationship between MPC and MPS are- Where, MPC= Marginal propensity to consume. MPS= Marginal propensity to save.

Introduction:
MPC and MPS are two important concepts in economics that are used to determine the level of consumption and saving in an economy. MPC stands for marginal propensity to consume, while MPS stands for marginal propensity to save.

Definition:
MPC refers to the proportion of additional income that is spent on consumption. For example, if an individual earns an additional $100 and spends $80 of it, the MPC would be 0.8. MPS, on the other hand, refers to the proportion of additional income that is saved. Using the same example, if the individual saves $20 of the additional $100 earned, the MPS would be 0.2.

Relationship:
The relationship between MPC and MPS can be defined by the following equation:
MPC + MPS = 1

This equation shows that the total income earned by an individual is either spent or saved. Therefore, the sum of MPC and MPS will always be equal to 1.

Importance:
Understanding the relationship between MPC and MPS is important because it helps to determine the level of consumption and saving in an economy. For example, if the MPC is high, it means that individuals are spending a large proportion of their income on consumption, which can stimulate economic growth. On the other hand, if the MPS is high, it means that individuals are saving a large proportion of their income, which can lead to lower economic growth.

Conclusion:
In conclusion, MPC and MPS are two important concepts in economics that help to determine the level of consumption and saving in an economy. The relationship between MPC and MPS is defined by the equation MPC + MPS = 1, which shows that the total income earned by an individual is either spent or saved. Understanding the relationship between MPC and MPS is important for policymakers to make informed decisions regarding economic growth and development.