As real disposable income decreases, the average propensity to consume (APC)
A) is always be below MPC.
B) decreases.
C) increase.
D) remains unchanged.

Question

Quizplus · Accepted Answer

When real disposable income decreases, the average propensity to consume (APC) typically increases because individuals tend to maintain their consumption levels even with lower income, leading to a higher proportion of income being spent on consumption.

As Real Disposable Income Decreases, the Average Propensity to Consume