What is Marginal Propensity to consume? How is it related to Marginal Propensity to Save?

Answer:

The marginal propensity to consume is the ratio of change in consumption expenditure to a change income.

Marginal Propensity to consume = Change in Consumption / Change in Income

MPC = ∆C / ∆Y

The marginal propensity to save is the ratio of change in saving to a change income.

Marginal Propensity to save = Change in saving / Change in Income

MPS = ∆S / ∆Y

Aggregate of marginal propensity to consume and marginal propensity to save is equal to one

MPC + MPS = 1

Also read : 

Consumption function

Saving function