Can the value of APS be negative? If yes, when. - Vidyadip

Question

Can the value of APS be negative? If yes, when.

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Answer

Yes, the value of APS can be negative, at very low level of income when consumption expenditure exceeds income, e.g., at an income level of ₹ 200, when the consumption expenditure is ₹ 240, the saving is (-) 40.
So, $\text{APS}=\frac{\text{S}}{\text{Y}}=\frac{-40}{200}=-0.2$

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