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Business Studies

Importance and Features of Business Environment

Can the value...

Question

Can the value of average propensity to save be negative? If yes, when?

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Solution

APS refers to Average Propensity to save which defines the amount of savings in every 1 rupee of income for all level of income which can be less than zero at income levels which are lower than the break-even point.

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Similar questions

Q. Distinguish between average propensity to save and marginal propensity to save. The value of which of these two can be negative and when?

Q. When the value of average propensity to save is negative, the value of marginal propensity to save will also be negative.
True/False.

Q. Explain the relationship between average propensity to consume and average propensity to save. Which of these can have a negative value and when?

Q. Which of the following cannot have a negative value? Give reasons.
(i) Average propensity to save (iiI) Marginal propensity to save.

Q. The value of average propensity to save can never be greater than 1.
True. Average propensity to save can never be greater than 1 as savings can never be more than national income.

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