The coefficient (1-b) is also known as
  • a)
    K
  • b)
    1-MPS
  • c)
    MPS
  • d)
    MPC
Correct answer is option 'C'. Can you explain this answer?

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Answers

Bhoomika Tank
Sep 28, 2018
As in consumption function = C(constant) + bYHere b is MPC.... (i) nd the relation between MPC and MPS is MPS + MPC =1 thus we can say that MPS = 1 - MPC ... (ii) So 1 - b = 1 - MPC (i) that means MPS (ii)

As in consumption function = C(constant) + bYHere b is MPC.... (i) nd the relation between MPC and MPS is MPS + MPC =1 thus we can say that MPS = 1 - MPC ... (ii) So 1 - b = 1 - MPC (i) that means MPS (ii)
As in consumption function = C(constant) + bYHere b is MPC.... (i) nd the relation between MPC and MPS is MPS + MPC =1 thus we can say that MPS = 1 - MPC ... (ii) So 1 - b = 1 - MPC (i) that means MPS (ii)