Question
Explain the following:
Average propensity to save (APS). Can value of APS be negative? If so, when?
Solution
Average propensity to save (APS). APS is the ratio of total saving to total income. Alternatively it is that part of total income which is saved. By dividing total saving (S) with total income (Y), we get APS. Symbolically:
APS = S/Y
For instance, in the following table when national income is र 200 crores, saving is र 30 crores. In this case APS = S/Y = 30/200 = 0.15 cr or 15%.
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, 
