state whether true or false and give reasons:
1. APS is always greater than 0
2. APS can never be less than 0
3. when APS is negative, MPS will also be negative.
4. sum of APC and MPC is always equal to 1.
5. the value of APS can never be greater than 1.
1) The given statement is false. This is because when consumption is greater than the income, APS will be less than zero.
2) The given statement is false. This is because when consumption is greater than the income, APS will be less than zero.
3) Follow the given link.
https://www.meritnation.com/ask-answer/question/when-the-value-of-aps-is-negative-mps-will-also-become-nega/income-determination/7306669
4) The given statement is false. Aggregate of APC and MPC is not equal to infinity as a derived rule.
5) The given statement is true. This is because savings of a consumer can never exceed his income as consumption is always positive. Hence, APC can never be greater than 1.
2) The given statement is false. This is because when consumption is greater than the income, APS will be less than zero.
3) Follow the given link.
https://www.meritnation.com/ask-answer/question/when-the-value-of-aps-is-negative-mps-will-also-become-nega/income-determination/7306669
4) The given statement is false. Aggregate of APC and MPC is not equal to infinity as a derived rule.
5) The given statement is true. This is because savings of a consumer can never exceed his income as consumption is always positive. Hence, APC can never be greater than 1.