Generally,as income rises,the average propensity to consume
A)stabilizes.
B)drops to zero.
C)increases.
D)becomes erratic.
E)decreases.

Question

Quizplus · Accepted Answer

The average propensity to consume (APC) refers to the percentage of income that is spent on consumption. As income rises, people tend to save a higher proportion of their income, so the APC decreases. This is because people's basic human needs are met at lower levels of income, so they have less need to spend on consumption as their income increases. Therefore, as income rises, the APC decreases.

Generally,as Income Rises,the Average Propensity to Consume