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Ex Ante Consumption

What is avera...

Question

What is average propensity to save?
Give the formula for its measurement.

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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. It is the ratio between the savings and income of the economy at a given point of time.
Average propensity to save= Savings/ Income.

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Q. Give the meaning of average propensity to save. What is its relation with average propensity to consume?

Q. Give the meanings of average propensity to save' and 'marginal propensity to save'. How are they calculated?

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

Q. Which of the following cannot have a negative value? Give reasons.
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