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Average Propensity to save
The Average Propensity to Save [APS] is defined as the fraction of aggregate national income which is devoted to savings. Thus if S denotes savings then,
APS = S/Y
In a closed ungoverned economy, where income is spent or saved, APC = APS = 1
Limitation The degree or success with which the central bank can use its bank rate policy to control the total credit in the economy depends upon the interest elasticity of in
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