As real disposable income increases, we expect the average propensity to consume (APC)
A)to always be below MPC.
B)to increase.
C)to decrease.
D)to remain unchanged.

Question

Quizplus · Accepted Answer

As real disposable income increases, the average propensity to consume (APC) typically decreases because a smaller proportion of additional income is spent on consumption, with more being saved.

As Real Disposable Income Increases, We Expect the Average Propensity