Alright, first you have to know what is MPC and MPS.

In the simplest form, MPC is how much money you tends to spend for consumption (C).

For example, if your income (Y) is RM 100 and your MPC is 0.6, it means you tends to spend RM 60 or 60% of your income to consumption (C) like buying stuff or services.

MPS on the other hand is how much money you tends to make saving (S) from your income.

Based on example above, if you already spent RM 60 on consumption, obviously you make saving what’s left of your money right?

In mathematical form, it can be explained as follows,

Income (Y) = RM 100
Consumption (C) = 0.6 or RM 60 or 60% of income
Savings (S) = 0.4 or RM 40 or 40% of income

Thus,

MPC + MPS = 0.6 + 0.4 = 1 or 100%

Consumption (C) and Saving (S) is COMPLEMENT to each other,

my lecturer ask to me. why the total mpc and mps equal to 1??? i don’t know how to answer. do you have any idea about the answer??

Alright, first you have to know what is MPC and MPS.

In the simplest form, MPC is how much money you tends to spend for consumption (C).

For example, if your income (Y) is RM 100 and your MPC is 0.6, it means you tends to spend RM 60 or 60% of your income to consumption (C) like buying stuff or services.

MPS on the other hand is how much money you tends to make saving (S) from your income.

Based on example above, if you already spent RM 60 on consumption, obviously you make saving what’s left of your money right?

In mathematical form, it can be explained as follows,

Income (Y) = RM 100

Consumption (C) = 0.6 or RM 60 or 60% of income

Savings (S) = 0.4 or RM 40 or 40% of income

Thus,

MPC + MPS = 0.6 + 0.4 = 1 or 100%

Consumption (C) and Saving (S) is COMPLEMENT to each other,

it means if your C is 0.6, then your S is 0.4.

If your C is 0.75, then your S would be 0.25

If you add both C and S, it always made up as 1.

Hope this help :)