An upward shift of the saving schedule suggests
A) nothing with respect to changes in the APC and APS; only that the MPS has changed.
B) that the APC and APS have both decreased at each GDP level.
C) that the APC and APS have both increased at each GDP level.
D) that the APC has decreased and the APS has increased at each GDP level.

Question

Quizplus · Accepted Answer

An upward shift in the saving schedule indicates that at each level of GDP, individuals are saving a larger portion of their income, which means the Average Propensity to Save (APS) has increased. Since the APS and the Average Propensity to Consume (APC) are complementary (APC + APS = 1), an increase in APS implies a decrease in APC.

An Upward Shift of the Saving Schedule Suggests