Write notes on the following:
Relationship between APC and APS. Can the value of APS be negative? If yes, when?
Relationship between APC and APS.
The sum of APC and APS is always equal to unity (1), i.e., APC + APS = 1. It is so, because income is either consumed or saved.
Again the relationship can be stated in the following way also:
APC = 1 – APS
APS = 1 – APC
Apparently if one is given, the other can be worked out.
The value of APS can be negative when consumption expenditure becomes higher than income. For example, if income is र 1,000 and consumption expenditure is र 1,200, then saving is -200 (i.e., dissaving).Then
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