Question

Which of the following can have the value of more than one and less than zero: (i) APC; (ii) APS; (iii) MPC; and (iv) MPS ?

Answer 1

APC refers to Average Propensity to Consume which defines the amount of consumption in every 1 rupee of income for all level of income which can be more than one as long as consumption is more national income, i.e. before the break-even point, APC > 1.
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.

But both MPC i.e. Marginal Propensity to Consume and MPS i.e. Marginal Propensity to Save cannot be more than one or less than zero as it is percentage change in consumption or saving when there is some change in the level of income which cannot be more than the change in income.