What is the Relationship between APC and APS class 12

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Average propensity to consume (APC) is the ratio of consumption expenditure (C) and income (Y), which indicates the average
percentage of income that is spent on consumption. It can be algebraically expressed as:

APC= Y/C

.Average propensity to save (APS) is the ratio of saving (S) and income(Y), expressing the average percentage of income that is saved. It is algebraically written as:

APS= Y/S

As the income is either consumed or saved, the sum of APC and APS is supposed to be equal to 1. Thus, the higher the APC, the lower will be the APS and vice versa.

APC + APS = 1

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Anurag Pathak
Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his Youtube channel for free lectures

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