when annotated as a decimal average propensity to consume ranges from zero to one at zero or 0 all income is being saved at one or 100 all income is being consumed 
propensity to consume vs propensity to savethe sum of the average propensity to consume and the average propensity to save is always equivalent to one a household or a nation must either spend or save all of its income the inverse of the average propensity to consume is the average propensity to save aps that figure is simply total savings divided by income the result is known as the savings ratio notably the savings ratio is normally based on its percentage of disposable income or after tax income an individual determining personal propensities to consume and save should probably use the disposable income figure as well for a more realistic measure example of average propensity to consumeassume a nation s economy has a gross domestic product gdp equivalent to its disposable income of 500 billion for the previous year the total savings of the economy was 300 billion and the rest was spent on goods and services the nation s aps is calculated to be 0 60 or 300 billion 500 billion this indicates the economy allocated 60 of its disposable income to savings the average propensity to consume is calculated to be 0 40 or 1 0 60 therefore the nation spent 40 of its gdp on goods and services aps can include saving for retirement a home purchase and other long term investments as such it can be a proxy for national financial health according to the bureau of economic analysis the average household in the united states saved 3 9 of their disposable income in may 2024 special considerationsthe marginal propensity to consume mpc is a related concept it measures the change in the average propensity to consume assume that the nation in the previous example increased its gdp to 700 billion and its consumption of goods and services rose to 375 billion the economy s average propensity to consume increased to 53 57 the nation s consumption increased from 200 billion to 375 billion alternatively the nation s gdp increased from 500 billion to 700 billion the nation s marginal propensity to consume is 87 5 375 billion 200 billion 700 billion 500 billion the marginal propensity measures the directional trend of how an entity is utilizing its money in this case 87 5 of new growth was further consumed 