MPC + MPS equals

1. Analyze the question The question asks what you get when you add the Marginal Propensity to Consume (MPC) and the Marginal Propensity to Save (MPS).

2. Explain the concept

• MPC = ΔC / ΔY. This is the fraction of any extra income that is spent on consumption.
• MPS = ΔS / ΔY. This is the fraction of any extra income that is saved.

Where ΔC is the change in consumption, ΔS is the change in saving, and ΔY is the change in income.

Any extra income a person receives can only be spent or saved, and nothing else. So the change in consumption plus the change in saving must equal the change in income:

ΔY = ΔC + ΔS

3. Step-by-step solution Divide both sides by ΔY:

ΔY / ΔY = ΔC / ΔY + ΔS / ΔY

1 = MPC + MPS

Checking the other options:

• A. Zero: Wrong. MPC and MPS are both positive fractions, so their sum cannot be zero.
• B. Multiplier: Wrong. The multiplier is 1 / (1 − MPC), which is the same as 1 / MPS. It is not the sum.
• D. APS: Wrong. APS (Average Propensity to Save) is S / Y, which is a different measure.

4. Answer MPC + MPS = 1, so the correct option is C. One.

5. Exam tip Remember "C + S = Y", which gives MPC + MPS = 1. This also means MPS = 1 − MPC. For example, if MPC = 0.8, then MPS = 0.2. JAMB often asks about this in calculation form, and the multiplier follows easily: 1 / 0.2 = 5.