B Com Exam > B Com Notes > Macro Economics > MPS, APS, MPC, APC - Macroeconomics
MPS, APS, MPC, APC - Macroeconomics | Macro Economics - B Com PDF Download
Marginal Propensity to Consume and Marginal Propensity to Save
The MPC makes up the gradient of the consumption line and the MPS makes up the gradient of the savings line in the consumption function.
Marginal Propensity to Consume
The Marginal Propensity to Consume (MPC) measures the increase in household consumption from an increase in household income.
To calculate MPC:
MPC = (Change in Consumption)/(Change in Disposable Income)
Can you calculate the MPC from the model below?
Answer:
Change in Consumption (Consumer Spending):
= 600-500
= 100
Change in Disposable Income:
= 900-500
= 400
MPC:
= 100/400
= 0.25
Average Propensity to Consume (APC)
Average Propensity to Consume measures the proportion of income spent on consumption.
APC = Total Consumption/Total Disposable Income
Can you find what the APC is from figure 1?
Answer:
Total Consumption = 600
Total Disposable Income = 900
APC
= 600/900
= 0.67
Note: As income increases, the APC decreases.
Marginal Propensity to Save
Marginal Propensity to Save (MPS) measures the increase in savings from a given increase in household income.
MPS = (Change in Savings)/(Change in Disposable Income) OR MPS = 1 - MPC
Can you find what the MPS is from figure 2?
Answer:
Method 1 - Find MPC
Change in Consumption
= 625-500
= 125
Change in Disposable Income
= 1000-500
= 500
MPC = 125/500
= 0.25
MPS = 1 -0.25
= 0.75
Method 2 - Find MPS
Change in Savings
= 375 - 0 (Note: the savings level at a disposable income of 500 is 0)
= 375
Change in Disposable Income
= 1000-500
= 500
MPS = 375/500
= 0.75
Average Propensity to Save (APS)
Average Propensity to Save (APS) measures the total proportion of income that is saved.
APS = Total Savings/ Total Income
Can you find the APS of figure 2?
Answer:
Total Savings = 375
Total Income = 1000
APS = 375/1000
= 0.375
Note: As income increases, the APS increases.
The document MPS, APS, MPC, APC - Macroeconomics | Macro Economics - B Com is a part of the B Com Course Macro Economics.
All you need of B Com at this link: B Com
|
59 videos|61 docs|29 tests
|
FAQs on MPS, APS, MPC, APC - Macroeconomics - Macro Economics - B Com
| 1. What is the meaning of MPS in macroeconomics? |  |
Ans. MPS stands for Marginal Propensity to Save in macroeconomics. It measures the change in saving resulting from a change in income. It indicates the proportion of additional income that individuals save rather than spend.
| 2. What is the significance of APS in macroeconomics? | |
Ans. APS refers to Average Propensity to Save in macroeconomics. It is the ratio of total saving to total income. APS helps in understanding the saving behavior of individuals or households in an economy.
| 3. How is MPC calculated in macroeconomics? | |
Ans. MPC stands for Marginal Propensity to Consume in macroeconomics. It is calculated as the change in consumption divided by the change in income. MPC measures the proportion of additional income that individuals spend rather than save.
| 4. What does APC represent in macroeconomics? | |
Ans. APC stands for Average Propensity to Consume in macroeconomics. It is calculated as the ratio of total consumption to total income. APC indicates the proportion of total income that individuals or households spend on consumption.
| 5. How do MPS and APC relate to each other in macroeconomics? | |
Ans. MPS and APC are related to each other in macroeconomics. The sum of MPS and APC always equals 1. This means that any change in income is either saved (MPS) or consumed (APC). As one increases, the other decreases, and vice versa.
Related Exams
About this Document
|
2.9K Views |
|
4.77/5 Rating |
|
Dec 23, 2024 Last updated |
Document Description: MPS, APS, MPC, APC - Macroeconomics for B Com 2024 is part of Macro Economics preparation.
The notes and questions for MPS, APS, MPC, APC - Macroeconomics have been prepared according to the B Com exam syllabus. Information about MPS, APS, MPC, APC - Macroeconomics covers topics
like and MPS, APS, MPC, APC - Macroeconomics Example, for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for MPS, APS, MPC, APC - Macroeconomics.
Introduction of MPS, APS, MPC, APC - Macroeconomics in English is available as part of our Macro Economics
for B Com & MPS, APS, MPC, APC - Macroeconomics in Hindi for Macro Economics course.
Download more important topics related with notes, lectures and mock test series for B Com
Exam by signing up for free. B Com: MPS, APS, MPC, APC - Macroeconomics | Macro Economics - B Com
Description
Full syllabus notes, lecture & questions for MPS, APS, MPC, APC - Macroeconomics | Macro Economics - B Com - B Com | Plus excerises question with solution to help you revise complete syllabus for Macro Economics | Best notes, free PDF download
Information about MPS, APS, MPC, APC - Macroeconomics
In this doc you can find the meaning of MPS, APS, MPC, APC - Macroeconomics defined & explained in the simplest way possible. Besides explaining types of
MPS, APS, MPC, APC - Macroeconomics theory, EduRev gives you an ample number of questions to practice MPS, APS, MPC, APC - Macroeconomics tests, examples and also practice B Com
tests
|
Explore Courses for B Com exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
Related Searches
APS
,APS
,MCQs
,MPC
,MPC
,Free
,Objective type Questions
,Previous Year Questions with Solutions
,ppt
,Exam
,Summary
,study material
,APC - Macroeconomics | Macro Economics - B Com
,Sample Paper
,APC - Macroeconomics | Macro Economics - B Com
,MPS
,Semester Notes
,practice quizzes
,mock tests for examination
,Viva Questions
,APC - Macroeconomics | Macro Economics - B Com
,Extra Questions
,past year papers
,APS
,MPC
,Important questions
,MPS
,video lectures
,shortcuts and tricks
,MPS
;
Additional Information about MPS, APS, MPC, APC - Macroeconomics for B Com Preparation
MPS, APS, MPC, APC - Macroeconomics Free PDF Download
The MPS, APS, MPC, APC - Macroeconomics is an invaluable resource that delves deep into the core of the B Com exam.
These study notes are curated by experts and cover all the essential topics and concepts, making your preparation more efficient and effective.
With the help of these notes, you can grasp complex subjects quickly, revise important points easily,
and reinforce your understanding of key concepts. The study notes are presented in a concise and easy-to-understand manner,
allowing you to optimize your learning process. Whether you're looking for best-recommended books, sample papers, study material,
or toppers' notes, this PDF has got you covered. Download the MPS, APS, MPC, APC - Macroeconomics now and kickstart your journey towards success in the B Com exam.
Importance of MPS, APS, MPC, APC - Macroeconomics
The importance of MPS, APS, MPC, APC - Macroeconomics cannot be overstated, especially for B Com aspirants.
This document holds the key to success in the B Com exam.
It offers a detailed understanding of the concept, providing invaluable insights into the topic.
By knowing the concepts well in advance, students can plan their preparation effectively.
Utilize this indispensable guide for a well-rounded preparation and achieve your desired results.
MPS, APS, MPC, APC - Macroeconomics Notes
MPS, APS, MPC, APC - Macroeconomics Notes offer in-depth insights into the specific topic to help you master it with ease.
This comprehensive document covers all aspects related to MPS, APS, MPC, APC - Macroeconomics.
It includes detailed information about the exam syllabus, recommended books, and study materials for a well-rounded preparation.
Practice papers and question papers enable you to assess your progress effectively.
Additionally, the paper analysis provides valuable tips for tackling the exam strategically.
Access to Toppers' notes gives you an edge in understanding complex concepts.
Whether you're a beginner or aiming for advanced proficiency, MPS, APS, MPC, APC - Macroeconomics Notes on EduRev are your ultimate resource for success.
MPS, APS, MPC, APC - Macroeconomics B Com Questions
The "MPS, APS, MPC, APC - Macroeconomics B Com Questions" guide is a valuable resource for all aspiring students preparing for the
B Com exam. It focuses on providing a wide range of practice questions to help students gauge
their understanding of the exam topics. These questions cover the entire syllabus, ensuring comprehensive preparation.
The guide includes previous years' question papers for students to familiarize themselves with the exam's format and difficulty level.
Additionally, it offers subject-specific question banks, allowing students to focus on weak areas and improve their performance.
Study MPS, APS, MPC, APC - Macroeconomics on the App
Students of B Com can study MPS, APS, MPC, APC - Macroeconomics alongwith tests & analysis from the EduRev app,
which will help them while preparing for their exam. Apart from the MPS, APS, MPC, APC - Macroeconomics,
students can also utilize the EduRev App for other study materials such as previous year question papers, syllabus, important questions, etc.
The EduRev App will make your learning easier as you can access it from anywhere you want.
The content of MPS, APS, MPC, APC - Macroeconomics is prepared as per the latest B Com syllabus.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup