Question

Distinguish between APS and MPS. Can the value of APS be negative? If yes, when? Justify with a example.
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Answer 1

Answer:

Simply put, total saving (S) divided by total income (Y) is called APS (APS = S/Y) whereas change in savings (ΔS) divided by change in income (ΔY) is called MPS (MPS = ΔS/ΔY). The value of APS can be negative when consumption expenditure becomes higher than income