Can APS ever be negative? If yes, give an example. - Vidyadip

Question

Can APS ever be negative? If yes, give an example.

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Answer

Yes, APS can be negative in situations when S is negative, i.e. when consumption exceeds income.

e.g. Y = ₹ 50, C = ₹ 100

S = Y - C = -50

$\text{APS}=\frac{\text{S}}{\text{Y}}=\frac{-50}{50}=-1$

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