Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

________ can have a negative value.

Which of the following option suits best in the above blank?

Options:

Marginal Propensity to Consume

Marginal Propensity to Save

Average Propensity to Consume

Average Propensity to Save

Correct Answer:

Average Propensity to Save

Explanation:

Savings can be negative. This happens when Consumption> Income. So, APS can be negative. Change in savings or change in consumption can never be negative. Hence, MPC and MPS are not negative. APC cannot be negative as consumption cannot negative.