If the average propensity to save (APS) is 0.70, then this means
A) people are saving 70 percent of their disposable income.
B) people are spending 70 percent of their disposable income.
C) people are saving 70 percent of their amount of consumption.
D) people are spending 70 percent of their amount of saving.

Question

Quizplus · Accepted Answer

Average propensity to save (APS) measures the percentage of disposable income that individuals save. Therefore, if APS is 0.70, it means that people are saving 70% of their disposable income, which is option A. Option B is incorrect as APS indicates saving behavior not spending behavior. Option C and D are also incorrect as they are not the correct definition of APS.

If the Average Propensity to Save (APS) Is 0