ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -APS can never be greater than one because APS is the ratio between total saving and total income (APS=SY). Total savings cannot be greater than total income during an accounting year.

Detailed explanation-2: -APS can never be 1 or greater than 1. 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 30, then the APS value will be-0.3.

Detailed explanation-3: -APC refers to Average Propensity to Consume which defines the amount of consumption in every 1 rupee of income for all level of income which can be more than one as long as consumption is more national income, i.e. before the break-even point, APC > 1. Was this answer helpful?

Detailed explanation-4: -APS refers to average propensity to save which defines the amount of savings in every 1 rupee of income for all level of income. It can be less than zero at income levels which are lower than the autonomous consumption expenditure, which refers to minimum consumption requirement/break-even point.

Detailed explanation-5: -Definition of Average Propensity to Consume (APC) And as long as the consumption is more than income, it will continue to be more than one. Next, when the consumption is equal to income, APC is equal to 1.