Marginal propensity to save (MPS) represents the proportion of each additional dollar earned that individuals choose to save rather than spend on consumption.
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Marginal Propensity to Consume (MPC): The proportion of each additional dollar earned that individuals choose to spend on consumption rather than save.
Disposable Income: The amount of income available for spending or saving after taxes have been deducted.
Paradox of Thrift: The idea that an increase in saving by individuals can lead to a decrease in overall economic output and income.
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