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Distinguish between Propensity to Consume and Propensity to Save, with the help of numerical examples.

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Propensity to Consume is the ratio of change in consumption over change in income. In short, MPC = △C/ △Y

Propensity to Save is the ratio of change in saving over change in income. In short, MPS = △C/ △Y

Y C △C MPC = △C/△Y S △S MPS = △S/△Y
0 50 - - - - -
100 100 50 0.5 0 - -
200 150 50 0.5 50 50 -
300 200 50 0.5 100 50 0.5
400 250 50 0.5 150 50 0.5
500 300 50 0.5 200 50 0.5

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