Answer :

The question asks about the relationship between the Marginal Propensity to Consume (MPC) and the Average Propensity to Save (APS). To answer this question, it's important to understand a few concepts from economics.

  1. Marginal Propensity to Consume (MPC): This is the proportion of any additional income that is spent on consumption rather than saved. It is a key concept in Keynesian economics and is usually expressed as a fraction of the additional income. For example, if someone receives an extra $100 and spends $75 of it, the MPC would be 0.75.

  2. Average Propensity to Save (APS): This refers to the fraction of total income that is saved rather than spent on consumption. It is calculated as total savings divided by total income.

In general, the identities and relationships commonly used in economics about consumption and savings are:

  • MPC + MPS = 1: This implies the sum of the marginal propensity to consume and the marginal propensity to save equals 1. The marginal propensity to save (MPS) is the fraction of any additional income that is saved, and both MPC and MPS together account for the entire change in income.

  • APS + APC = 1 or not relevant in this context.

Given the choices provided in the question, none directly matches the typical relationships used in economics for MPC and APS. Therefore, it is plausible that the question contains an error or is missing a contextual explanation of APS.

Therefore, the correct relationship from these choices is not directly definable without further clarification, but if we try to associate it with similar relationships we learned:

  • MPC + APS = MPC is incorrect.
  • MPC = APS suggests MPC and APS are equal, which generally isn't applied.
  • MPC - APS = MPS is unrelated.
  • MPC + APS = 1 is not a standard calculation in economics considering the context given but aligns more closely, assuming a possible misunderstanding.

The correct choice based on typical economic relations would not necessarily feature APS in this immediate format; thus additional context is advisable.

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