According to the above table, the marginal propensity to consume is
-According to the above table, if real Gross Domestic Product (GDP) equals $30,000, what is the average propensity to consume?
A) 0.67
B) 0.75
C) 0.8
D) 0.87

Question

Quizplus · Accepted Answer

The average propensity to consume (APC) is calculated by dividing consumption by the level of income (or GDP). If real GDP equals $30,000, and assuming from the given options that consumption at this income level corresponds to an APC of 0.75, it means that 75% of the income is being consumed. This is a direct calculation based on the definition of APC, which is the ratio of total consumption to total income.

According to the Above Table, the Marginal Propensity to Consume