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Average Propensity to Save

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Average Propensity to Save
The amount of money a person saves as a percentage of total income. For example, if one makes $50,000 and spends $40,000, the average propensity to save is 20%. Countries with a low average propensity to save generally have a lower unemployment rates because the demand to buy things creates jobs. However, they may be more susceptible to recession as people save very little. It should not be confused with the marginal propensity to save.


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Results were similar to those of Western studies: saving and the average propensity to save were positively correlated with income, and negatively correlated with family size.
 
 
 
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