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Question
Define average propensity to save (APS).
Solution
- The average propensity to save is the ratio of saving to income.
- APS is the quotient obtained by dividing the total saving by the total income. In other words, it is the ratio of total savings to total income. It can be expressed algebraically in the form of equation as under
- APS = `"S"/"Y"` Where, S = Saving; Y = Income
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