If consumption is $650 when real disposable income is $1,000, the average propensity to consume is
A) 0.80.
B) 0.65.
C) 0.065.
D) 0.08.

Name: If consumption is $650 when real disposable income is $1,000, the average propensity to consume is A) 0.80. B) 0.65. C) 0.065. D) 0.08.
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Question

Quizplus · Accepted Answer

Average propensity to consume (APC) is defined as the ratio of consumption to real disposable income. Therefore, APC = 650/1000 = 0.65.

If Consumption Is $650 When Real Disposable Income Is $1,000