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Question
Define or explain the concept Average propensity to save .
Solution
Average Propensity to Save (APS) refers to the ratio of savings to the level of disposable income. This is also known as Saving Ratio, as it is expressed as a ratio of income saved and disposable income (Yd). Algebraically, \[APS = \frac{S}{Y_d}\].
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| Group ‘A’ | Group ‘B’ | ||
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(6) | Inelastic demand | |
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(7) | Luxurious commodities |
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