The average propensity to save

Question

Quizplus · Accepted Answer

By definition, the average propensity to consume (APC) plus the average propensity to save (APS) equals 1. This means that all income is either consumed (APC) or saved (APS). Therefore, choice A is correct. 
Choice B is incorrect because the APS is never negative. It may be zero or positive, but never negative.
Choice C is also incorrect because as income rises, the APS typically increases since people usually save more at higher income levels.
Choice D is incorrect because the sum of APS and APC does not equal 1.

The Average Propensity to Save