Practicing Success
______ can never be negative while _____ can have value as 1. |
APS, APC MPC, APS APC, APS MPS, APC |
MPS, APC |
MPS can never be negative while APC can have value as 1. MPS can never be negative as a change in consumption can never be more than a change in income. Whereas, APS can be negative (dissavings) at zero level of income and when C > Y. APC can be equal to 1 at the break-even point i.e. when C = Y. Whereas, APS can never be equal to 1 because savings can never be equal to income as people spend a part of income on consumption. |