Question

Are you a saver or a spender? What has influenced your saving and spending behavior? Do you save or invest regularly with discipline for the long run? Define marginal propensity to consume.

Answer 1

Since I both consume some dollars as well as save some dollars out of my income, I am both a saver and a spender.

My spending and saving behavior are influenced by my immediate monetary commitments (of maintaining my family) and my future requirements (joining a Doctoral program, hence saving for the course fee, as well as savings for exigencies).

I save and invest regularly, keeping in mind my need for long run financial cushion, except any month where current-period sending rises due to some unforeseen emergency expenditure.

Marginal propensity to consume (MPC) is the fraction of dollars I spend for every additional dollar I earn. For example, if earn an additional $100 and spend $80 out of it, my MPC equals 0.80 (= $80 / $100).