If disposable income is $3,000 and saving is $1,200, how much is the average propensity to consume?
A) 0.4
B) 0.6
C) 1.2
D) 2.5

Name: If disposable income is $3,000 and saving is $1,200, how much is the average propensity to consume? A) 0.4 B) 0.6 C) 1.2 D) 2.5
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Question

Quizplus · Accepted Answer

Average propensity to consume (APC) is the ratio of consumption to disposable income. APC = Consumption/Disposable income. So, in this case, APC = (3000-1200)/3000 = 0.6. Therefore, the answer is B.

If Disposable Income Is $3,000 and Saving Is $1,200, How