In an economy, the ratio of Average Propensity to Consume and Average Propensity to Save is 5 : 3. The level of income is ₹ 6,000. How much are the savings? Calculate.
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Here,$\frac{\text{APC}}{\text{APS}}=\frac{5}{3}$ and $\text{Y}= ₹ 6,000$
$\text{APC}=\frac{5}{8},\text{APS}=\frac{3}{8}$
Now, as $\text{APS}=\frac{\text{S}}{\text{Y}}$$=\frac{3}{8}=\frac{\text{S}}{6,000}$
Now $\text{S}=\frac{6,000\times3}{8}$ Hence, saving $=\frac{18,000}{8}=₹ \ 2,250$
$\text{APC}=\frac{5}{8},\text{APS}=\frac{3}{8}$
Now, as $\text{APS}=\frac{\text{S}}{\text{Y}}$$=\frac{3}{8}=\frac{\text{S}}{6,000}$
Now $\text{S}=\frac{6,000\times3}{8}$ Hence, saving $=\frac{18,000}{8}=₹ \ 2,250$
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