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Average Propensity to Consume and Save
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Average Propensity to Consume and Save
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14. Income and Consumption / Average Propensity to Consume and Save / Problem 1
Problem 1
How does the marginal propensity to save (MPS) differ from the average propensity to save (APS)?
A
MPS measures total savings relative to total income, while APS measures the change in savings relative to a change in income.
B
MPS and APS both measure total savings relative to total income.
C
MPS and APS both measure the change in savings relative to a change in income.
D
MPS measures the change in savings relative to a change in income, while APS measures total savings relative to total income.
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