When the average propensity to save (APS)is 0.20, then this means
A)people are spending 20 percent of their disposable income.
B)people are spending 80 percent of their disposable income.
C)people are saving $0.20 of the last dollar earned.
D)people are spending 60 percent of their disposable income and investing the remaining 20 percent.

Question

Quizplus · Accepted Answer

The average propensity to save (APS) is the ratio of savings to disposable income. Therefore, if APS is 0.20, it means people are saving 20 percent of their disposable income, which implies they are spending 80 percent of their disposable income.

When the Average Propensity to Save (APS)is 0