As exports increase there is an increase in the income of all persons associated with the exports industries . These in turn create demand for goods . But this is dependent upon their marginal propensity to save ( MPS ) and marginal propensity to import ( MPM ).
12.
:Although increasing short-run Aggregate Demand ( consumption ) is the point of a fiscal stimulus, if it hadn't been for the low marginal propensity to save ( amount of money that goes into savings for each dollar of additional income ) in the United States, it may not have had so many problems.
