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New Approaches to Alleviation

State true or...

Question

State true or false. Give reason.
Average propensity to save is always greater than zero.

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Solution

False.
APS refers to average propensity to save which defines the amount of savings in every 1 rupee of income for all level of income. It can be less than zero at income levels which are lower than the autonomous consumption expenditure, which refers to minimum consumption requirement/break-even point.

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Similar questions

Q. Are the following statements true or false? Give reasons.
Value of average propensity to save can never be less than zero.

Q. State whether the given statement is True or False :

Average propensity to save can be negative.

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. Sum of average propensity to consume and marginal propensity to consume is always equal to 1.
True/False.

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

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New Approaches to Alleviation

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