What Is Social Savings?
The propensity to save refers to the proportion of the total income that is part of the income that is not included in consumer spending. It shows the development trend of the relationship between savings and income and the proportion of income used for saving and total income. There is a distinction between average saving propensity and marginal saving propensity. The meaning of average saving tendency is that it can statically measure the economic development of a country or society; the meaning of marginal saving tendency is that it can dynamically judge the division of stages in the process of economic development. [1]
Saving tendency
Right!
- Chinese name
- Saving tendency
- Foreign name
- propensity to save
- Definition
- Refers to the ratio of savings to income
- Types of
- Average Savings Preference and Marginal Savings Tendency
- The propensity to save refers to the proportion of the total income that is part of the income that is not included in consumer spending. It shows the development trend of the relationship between savings and income and the proportion of income used for saving and total income. There is a distinction between average saving propensity and marginal saving propensity. The significance of average saving tendency is that it can statically measure the economic development of a country or society; the significance of marginal saving tendency is that it can dynamically judge the division of stages in the economic development process. [1]
- Types of
- Average propensity to save: It represents the proportion of savings in income, that is, APS = S / Y. The average saving propensity can also be positive or negative. In general, when income is low, the average saving propensity can be negative; as income increases, the average saving propensity increases, and its value changes to a positive value, but is always less than 1.
- Marginal propensity to save: It indicates the proportion of increased savings in the increased income, that is, MPS = S / Y. Marginal saving propensity is generally positive, but less than 1, that is, 0 <MPS <1, but as income increases, marginal saving propensity tends to increase.