A higher marginal propensity to save (MPS) will lead to a larger spending multiplier, which means government spending will have a greater impact on aggregate demand than tax cuts.

Actually, a higher marginal propensity to save (MPS) means that people save more of their income instead of spending it. This leads to a smaller spending multiplier because when people save more, there is less money circulating in the economy to boost demand. For example, if the government spends $100 and people save a lot, perhaps only $50 of that gets spent again in the economy, leading to less overall impact. In contrast, when tax cuts occur, people might spend a larger portion of their extra income, which can create a stronger boost in demand. Therefore, higher saving reduces the effectiveness of government spending compared to tax cuts in increasing economic activity.