In an economy, the ratio of Average

CBSE Class 12 CBSE Class 12 Economics
,
1

In an economy, the ratio of Average Propensity to Consume and Average Propensity to Save is 5:3. The level of income is 6000. How much are the savings? Calculate.

2

Here,
APC / APS = 5 / 3 and APS = 6000
APC = 5 / 8, APS = 3 / 8
Now, as, APS = S / Y or 3 / 8 = S / 6000
S = 6000 x 3 / 8
Hence, savings = 18000 / 8 = 2250