Step 3: The relationship between MPC and MPS. At every level of national income, the MPC is 0.6 and the MPS is 0.4. Therefore, MPC + MPS = 1.
Your Turn: Fill in the blanks in the following table. (Enter your responses as real number rounded to two decimal places.)
National Income
and Real GDP (Y)
Consumption
(C)
Saving
(S)
Marginal Propensity
to Consume (MPC)
Marginal Propensity
to Save (MPS)
$10,000
$9,000
$1000
11,000
9,600
1400
12,000
10,190
1810
13,000
10,770
2230
14,000
11,350
2650