APC is equal to
A)The change in total consumption divided by the change in total disposable income.
B)The change in total saving divided by the change in total disposable income.
C)Total consumption divided by total disposable income.
D)Total saving divided by total disposable income.

Question

Quizplus · Accepted Answer

APC (average propensity to consume) is defined as the total consumption divided by total disposable income. So, option C is the correct choice. Option A is the formula for the marginal propensity to consume (MPC), whereas option B is the formula for the marginal propensity to save (MPS). Option D is also incorrect, as it is the formula for the average propensity to save.

APC Is Equal to