If the Average Propensity to Save (APS) Is 0

question 335

Multiple Choice

If the average propensity to save (APS) is 0.70, then this means

• A) people are saving 70 percent of their disposable income.
• B) people are spending 70 percent of their disposable income.
• C) people are saving 70 percent of their amount of consumption.
• D) people are spending 70 percent of their amount of saving.

Comprehend the role of the price system in sending signals to buyers and sellers.

Recognize the effect of price changes on quantity supplied and quantity demanded.

Understand the causes and effects of shortages and surpluses in the market.

Analyze the economic impact of government intervention in the price system through examples like usury laws and minimum wage laws.

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Definitions:

Production Possibilities

The different quantities of goods and services an economy can produce when all its resources are fully and efficiently utilized.

Opportunity Cost

The expense incurred by not choosing the second-best option available during decision-making.

Farmer

An individual engaged in agricultural activities, involved in the cultivation of crops or the raising of livestock.

Economic Progress

The process through which an economy grows or improves its capacity to meet its population's needs and wants.