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Ex Ante Consumption

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Question

[dummy to be removed] The propensity to save means

A

Ratio of saving to income

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B

The tendency to save more

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C

The tendency to save less

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D

None of these

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Solution

The correct option is A
Ratio of saving to income

The marginal propensity to save gives the ratio of total additional planned savings in an economy to the total additional income of the economy.

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Similar questions

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.

Q. If National income is Rs. 50 crore and Saving Rs. 5 crore, find out average propensity to consume. When income rises to Rs. 60 crore and saving to Rs. 9 crore, what will be the average propensity to consume and the marginal propensity to save?

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. What do you mean by savings ? Define average propensity to save and Marginal propensity to save.

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