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Average Propensity to Save

Average Propensity to Save (APS) may be defined as the ratio of total savings to total disposable income. Symbolically,

                APS = S/Y
Where    S = total savings and
                Y total disposable income.

For example, total saving in an economy is Rs. 2,000 crore and total disposable income is Rs. 10,000 crore. Then, the APS will be calculated as follows:

APS = S/Y = Rs. 2,000 / Rs. 10,000 =  0.2 or 20%

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