FIGURE 21-1
-Refer to Figure 21-1. The APC will be equal to one 1.0) when disposable income is equal to
A) 0.
B) Y1.
C) Y2.
D) Y3.
E) desired saving.

Name: FIGURE 21-1 -Refer to Figure 21-1. The APC will be equal to one 1.0) when disposable income is equal to A) 0. B) Y1. C) Y2. D) Y3. E) desired saving.
Brand: Quizplus
Rating: 4.8 (30 reviews)

Question

FIGURE 21-1
-Refer to Figure 21-1. The APC will be equal to one 1.0) when disposable income is equal to
A) 0. 
B) Y1. 
C) Y2. 
D) Y3. 
E) desired saving.

Quizplus · Accepted Answer

The APC is defined as consumption divided by disposable income. When disposable income is equal to Y2, consumption is equal to 0.8Y2. Therefore, the APC will be 0.8/ Y2, which is equal to 1.0.

FIGURE 21-1 -Refer to Figure 21-1. the APC Will Be Equal to Equal