Financial Terms
Marginal Propensity to Save

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Definition of Marginal Propensity to Save

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Marginal Propensity to Save

Fraction of an increase in disposable income that is saved.



Related Terms:

Average Propensity to Save

Ratio of saving to disposable income. See also marginal propensity to save.


Average Propensity to Consume

Ratio of consumption to disposable income. See also marginal propensity to consume.


Marginal

Incremental.


Marginal cost

The cost of producing one extra unit.


Marginal cost

The incremental change in the unit cost of a product as a result of a
change in the volume of its production.



Marginal Propensity to Consume

Fraction of an increase in disposable income that is spent on consumption.


Marginal Propensity to Import

Fraction of an increase in disposable income that is spent on imports.


Marginal Propensity To Save Image 2

Marginal tax rate

The tax rate that would have to be paid on any additional dollars of taxable income earned.


marginal tax rate

Additional taxes owed per dollar of additional income.


Marginal Tax Rate

Percent of an increase in income paid in tax.



 

 

 

 

 

 

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