The value of APS (Average Propensity to Save) can never be :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 1
The average propensity to save (APS) is saving per unit of income, S/Y. Saving is the part of income that is not consumed. So APS is 1 only when the whole income is saved and consumption is zero. That cannot happen, because some consumption always takes place, even when income is zero.
The other values can occur. APS is negative when consumption is more than income: with income of 100 and consumption of 150, saving is −50 and APS is −0.5. APS is 0 when consumption equals income, and 0.5 when half of income is saved.
NCERT (2026-27): “4.1.1. Consumption The most important determinant of consumption demand is household income. A consumption function describes the relation between consumption and income. The simplest consumption function assumes that consumption changes at a constant rate as income changes. Of course, even if income is zero, some consumption still takes place. Since this level of consumption is independent of income, it is called autonomous consumption.…”
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