Read the passage carefully and answer the questions based on the passage:
Calculate various parameters of Aggregate Demand, Aggregate Supply and related concepts
|
Income (in Crore) |
Consumption (in crore) |
|
0 |
50 |
|
50 |
75 |
|
100 |
100 |
|
200 |
150 |
|
300 |
200 |
|
400 |
250 |
When income is more than consumption, then value of Average Propensity to Save (APS) is.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → More than zero.
-
Average Propensity to Save (APS) = Saving / Income
-
Saving = Income – Consumption
-
When income is more than consumption, savings are positive, so:
APS = Positive Saving/ Positive Income = Positive Value
Thus, the value of APS is more than zero when income exceeds consumption.
Example from the table:
At income = ₹200 crore and consumption = ₹150 crore:
Saving = 200 – 150 = ₹50 crore
APS = 50 / 200 = 0.25 → More than zero.