The average propensity to consume (APC) is
A) the rate at which real consumption spending changes over time.
B) the percentage of real disposable income saved.
C) the percentage of real disposable income consumed.
D) the percentage of additional real disposable income that will go toward additional consumption spending.

Question

Quizplus · Accepted Answer

The average propensity to consume (APC) is defined as the percentage of real disposable income that is consumed. It represents the proportion of income that households spend on consumption, on average. A high APC indicates that households are spending a relatively large share of their income on consumption, while a low APC indicates that they are saving more of their income.

The Average Propensity to Consume (APC) Is