Economics: Principles, Problems, and Policies, 19th Edition

by McConnell, Campbell R.; Brue, Stanley L.; Flynn, Sean M.

Published by McGraw-Hill Education

ISBN 10: 0073511447

ISBN 13: 978-0-07351-144-3

Chapter 27 - Basic Macroeconomic Relationships - Questions - Page 565: 2

Answer

The APC is the fraction of total income that is consumed, and the MPC is the value of the slope of the consumption schedule. The MPS is the value of the slope of the saving schedule. When added, the values of the MPC and the MPS must equal 1 because the two lines combine to form a 45 degree angled line.

Work Step by Step

Textbook pages 551 - 552.

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