Question

Give the types of propensity to save.

Answer 1

1. Average Propensity to Save: It refers to the ratio of total savings to total income. 
   APS = `S/Y`
2. Marginal Propensity to Save: It refers to the change in savings due to a change in income.
   MPS = `(ΔS)/(ΔY)`
   where (ΔS) is the change in savings and (ΔY) is the change in income.