Asked by Jincy Robin on Jun 16, 2024
Verified
When disposable income is 4,000,the APC is
A) .25.
B) .5.
C) .75.
D) 1.0.
E) 1.25.
APC (Average Propensity to Consume)
The fraction of income that is spent on consumption as opposed to savings.
- Grasp the concepts of marginal propensity to consume (MPC) and save (MPS), and their relevance to economic behavior.
Verified Answer
BR
Brittany ReneeJun 16, 2024
Final Answer :
C
Explanation :
The Average Propensity to Consume (APC) is calculated as the ratio of consumption to disposable income. If the disposable income is 4,000 and the APC is 0.75 (or 75%), it means that 75% of the disposable income is being spent on consumption. This is a common economic concept used to understand consumer behavior.
Learning Objectives
- Grasp the concepts of marginal propensity to consume (MPC) and save (MPS), and their relevance to economic behavior.