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What Is the Marginal Propensity to Consume? Explain Why the Sum

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Short Answer

What is the marginal propensity to consume? Explain why the sum of marginal propensity to consume and marginal propensity to save must equal 1.


Definitions:

Required Return

The minimum profit or yield that an investor aims for when investing in a financial instrument or project.

Payback Period

The duration required to recover the cost of an investment, calculated by dividing the initial investment by the annual cash inflow.

Heating System

A mechanism for maintaining temperatures at an acceptable level; by using thermal energy within a home, building, or other dwelling.

Required Rate Of Return

The minimal annual profit rate required to attract investment from individuals or corporations into a specific security or initiative.

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