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Question
Show that APC + APS = 1.
Very Short Answer
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Solution
APS = `S/Y`; APC = `C/Y`
Income is either consumed or saved, thus
C + S = Y
`C/Y+S/Y`
= `C+S/Y`
= `Y/Y`
= 1
APC + APS = 1
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Chapter 18: Consumption Function {Propensity to Consume) - TEST QUESTIONS [Page 18.17]
