What will be APC when APS 0 ........

Introductory Macro Economics Determination of Income and Employment

What will be APC when APS = 0?

One

Zero

Two

Infinite

- Average Propensity to Save (APS) = 0

- This means that people are not saving any part of their income. Their entire income is being spent.

- Average Propensity to Consume (APC)

- APC is the fraction of total income that is consumed.

- If APS is 0, it implies the entire income is consumed, as none is saved.

- Option 1: One

- This is correct. If APS = 0, then APC must be 1. This is because all the income is spent.

- Option 2: Zero

- If APC were zero, it would mean no income is used for consumption, which contradicts APS = 0.

- Option 3: Two

- APC cannot be more than 1 because you can't consume more than total income without saving.

- Option 4: Infinite

- Infinite doesn't apply to proportions like APC, which has a maximum value of 1.

Option:1 - One is correct.

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