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Marginal Propensity to Save Calculator

LAST UPDATE: August 29th, 2018

Calculator

What is marginal propensity to save?

MPS is the amount that savings will increase (or decrease) for every increase (or decrease) in disposable income.

When income increases, those who benefit from it have a choice to either save or spend. If they save (instead of spend) 40% of their increase in income, their MPS would be 0.4 (and their MPC, marginal propensity to consume, would be 0.6).

Formula

Marginal Propensity to Save = Change in Savings / Change in Income

Example

Change in savings is $600 and change in income is $1500.

MPS = $600 / $1500 = 0.4

Therefore, MPS is 0.4.

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