Final answer:
The term MPS stands for Marginal Propensity to Save. It represents the proportion of an additional unit of income that an individual chooses to save, rather than consume.
Step-by-step explanation:
The term MPS stands for Marginal Propensity to Save. It represents the proportion of an additional unit of income that an individual chooses to save, rather than consume. The formula MPC + MPS = 1 suggests that the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) sum up to 1, meaning that any change in income will either be spent or saved. For instance, if the MPC is 0.9, the MPS would be 0.1.