Marginal Propensity To Save - Slope of Saving Line

Slope of Saving Line

Marginal propensity to save is also used as an alternative term for slope of saving line. The slope of a saving line is given by the equation S = -a + (1-b)Y, where -a refers to autonomous savings and (1-b) refers to marginal propensity to save (here b refers to marginal propensity to consume but as MPC + MPS = 1, so (1-b) refers to MPS).

In this diagram, the savings function is an increasing function of disposable income i.e. savings increase as income increases.

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