MPS could be calculated by taking the ratio consumption expenditure/ disposal income away from 1? is it true?
I am not quite clear on what you mean by this, so I will show you how I know to calculate the marginal propensity to save. MPS is defined as how much of the "next" dollar a person gets will be saved. Here is the correct way of calculating this:
What you have to do to calculate MPS is to look at the relationship between income and saving. The actual formula is that MPS = change in saving / change in income.
So, if I get one more dollar and I save $.75 of it, the calculation is MPS = .75 / 1. In that case, my MPS is .75.
Now that I think about it more, I think what you are saying is correct. I think you are asking if this equation would be true:
1- (change in spending/change in income) = MPS.
In our example above, this would be
1- (.25/1) = MPS
1 - .25 = MPS and MPS = .75