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# Define Or Explain the Concept Average Propensity to Save . - Economics

ConceptConsumption Function and Propensity to Save

#### 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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#### APPEARS IN

2012-2013 (March) (with solutions)
Question 2.1.5 | 2.00 marks
Solution Define Or Explain the Concept Average Propensity to Save . Concept: Consumption Function and Propensity to Save.
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