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.

average propensity to save (APS)

the fraction of a given level of NATIONAL INCOME that is saved (see SAVING):

Alternatively, saving can be expressed as a proportion of DISPOSABLE INCOME. See also PROPENSITY TO SAVE, MARGINAL PROPENSITY TO SAVE.