Suppose the marginal propensity to consume is 0.75. What does this mean? What do we know about the marginal propensity to save? What do we know about the average propensity to consume?
The marginal propensity to consume (MPS) the percent of an additional amount of income that would be spent on consumption (by a person or a group of people). Whatever the person doesnt spend, is by definition, savings; MPS=(1-MPC). So, with MPC=.75, if income rose by, say, $100 then consumption would rise by $75, savings by $25.
Current statistics show that current savings rates are quite low, relative to previous generations.
The Average propensity to consume APC is simply (total consumption)/(total income)
In general, the MPC is a "statistic" regarding the marginal income. You should not generally infer information about the APC based solely on the MPC. That said, IF the MPC is constant across all income classes, then the MPC=APC.
The marginal propensity to consume (MPC) is the proportion of an additional amount of income that will be spent on consumption. In this case, with an MPC of 0.75, it means that for every additional dollar of income, 75 cents will be spent on consumption and 25 cents will be saved.
The marginal propensity to save (MPS) is the proportion of an additional amount of income that will be saved instead of spent on consumption. It is calculated as 1 minus the MPC. So, in this case, the MPS would be 0.25.
The average propensity to consume (APC) is the proportion of total income that is spent on consumption. It is calculated by dividing total consumption by total income. The MPC and APC are not necessarily the same unless the MPC is constant across all income levels. If the MPC is constant, then the MPC is equal to the APC.
Regarding current savings rates, they are generally observed to be low relative to previous generations. This means that people are spending a larger proportion of their income on consumption rather than saving.