Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

The value of APS (Average Propensity to save) can never be :

Options:

-0.5

0

+0.5

1

Correct Answer:

1

Explanation:

The correct answer is option (4) : 1

APS can never be 1 or greater than 1 as savings can never be equal to income. There will always be some expenditure. 

That said, APS can have a negative value if income is zero and consumption has a positive value. For example, if income is 0 and consumption is 50, then the APS value will be -0.5.