If disposable income is $250 and saving is $50, how much is the average propensity to consume?
A) 0.2
B) 0.25
C) 0.5
D) 0.8

Name: If disposable income is $250 and saving is $50, how much is the average propensity to consume? A) 0.2 B) 0.25 C) 0.5 D) 0.8
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Question

Quizplus · Accepted Answer

The average propensity to consume (APC) is calculated as consumption divided by disposable income. If saving is $50 and disposable income is $250, then consumption is $200 ($250 - $50). Therefore, APC = $200 / $250 = 0.8.

If Disposable Income Is $250 and Saving Is $50, How