When the average propensity to save (APS) is 0.20, then this ...

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When the average propensity to save (APS) is 0.20, then this means
 
  A) people are spending 60 percent of their disposable income and investing the remaining 20 percent.
  B) people are spending 20 percent of their disposable income.
  C) people are spending 80 percent of their disposable income.
  D) people are saving 0.20 of the last dollar earned.

Question 2

In the classical view, if desired saving exceeds desired investment
 
  A) the interest rate would increase. B) government spending must rise.
  C) government spending must fall. D) the interest rate would decline.

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Answer to Question 1

C

Answer to Question 2

D

[luminitza]

Excellent

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