Match List I with List II
| List I | List II | ||
| A. | Marginal propensity to consume | I. | \(\frac{C }{ Y}\) |
| B. | Marginal propensity to save | II. | \(\frac{ΔC }{ ΔY}\) |
| C. | Average propensity to save | III. | \(\frac{S }{ Y}\) |
| D. | Average propensity to consume | IV. | \(\frac{ΔS }{ ΔY}\) |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
MPC i.e. Marginal propensity to consume is the ratio of change in consumption to change in income. \(\frac{ΔC }{ ΔY}\)
MPS i.e. Marginal Propensity to save is the ratio of change in savings to change in income. \(\frac{ΔS }{ ΔY}\)
APS i.e. Average propensity to save is the ratio of savings to income. \(\frac{S }{ Y}\)
APC i.e. Average propensity to consume is the ratio of consumption to income. \(\frac{C }{ Y}\)