The fraction, or percentage, of total income that is saved is called the
A) average propensity to save.
B) marginal propensity to save.
C) disposable income schedule.
D) saving schedule.

Question

Quizplus · Accepted Answer

The average propensity to save (APS) measures the fraction of total income that an individual or a household saves. It is calculated as the ratio of saving to disposable income. It is also expressed as a percentage. Therefore, option A, "average propensity to save," is the correct answer. Option B, "marginal propensity to save," refers to the change in saving that results from a change in income. Option C, "disposable income schedule," is a schedule that shows the amount of disposable income that households have at different levels of income. Option D, "saving schedule," is a schedule that shows the amount of saving that households do at different levels of income.

The Fraction, or Percentage, of Total Income That Is Saved