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Propensity is defined as a natural tendency. An example of propensity is an inborn love for writing. pl. -Â·ties. 1  a natural inclination or tendency; bent.  Obs. favorable inclination; bias (for)
The marginal propensity to save (MPS) is the fraction of an increase in income that is not spent on an increase in consumption. That is, the marginal propensity to save is the proportion of each additional dollar of household income that is used for saving. It is the slope of the line plotting saving against income.