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Aggregate Demand, Consumption & Saving · Question 29 of 60

Question 29

MediumOriginal question

Which of these can be negative?

Options for question 29

Show the answer and explanation
CorrectNot quiteAnswer A

Correct answer: A

Explanation

  1. At incomes below break-even, saving is negative, so APS = S ÷ Y is negative.

  2. MPC and MPS are positive fractions in Keynes's theory; APC is always positive.

Concept
Negative APS
Typical time
70 s
Your time
—
The rule this testsAPC, MPC, APS and MPS
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