Which of the following is TRUE?
A) APC + MPS = 1
B) APC + APS = 1
C) 1 + APC = APS
D) APC - APS = 1

Question

Quizplus · Accepted Answer

APC (average propensity to consume) and APS (average propensity to save) are complementary to each other. They represent the ratio of consumption expenditure and saving to disposable income respectively. Since disposable income is either consumed or saved, APC and APS together add up to one. Hence, the correct equation is APC + APS = 1.

Which of the Following Is TRUE