Q7 of 25 Page 4

Can the average propensity to consume be greater than one? Explain with the reason.

Yes, the average propensity to consume can be greater than one when the consumption exceeds income. At that level, the average propensity to save will be negative. APC will be greater than 1 if the APS is negative.


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The sum total of APC and APS is always equal to one, even when APC >1. Is it true?

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