If consumption increases while income remains the same, the average propensity to consume will:
A) Increase and then decrease
B) Remain constant
C) Increase
D) Decrease

Question

Quizplus · Accepted Answer

The average propensity to consume (APC) is the ratio of consumption to income. If consumption increases while income remains the same, then the APC will increase. This is because the numerator (consumption) is increasing while the denominator (income) is constant, resulting in a higher ratio.

If Consumption Increases While Income Remains the Same, the Average