Which of the following statements about consuming in excess of one's disposable income is not true?
A) It is possible, and it's called dissaving.
B) In this case, the values of both saving and the APS are negative.
C) (APC + APS) will be less than 1 in this situation.
D) The value of APC will be greater than 1 in this case.

Question

Quizplus · Accepted Answer

When consuming in excess of one's disposable income, the Average Propensity to Consume (APC) is greater than 1, and the Average Propensity to Save (APS) is negative, leading to (APC + APS) equaling 1, not less than 1. This is because APC and APS are complementary, with their sum always equaling 1, regardless of whether consumption exceeds income.

Which of the Following Statements About Consuming in Excess of One's