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Question
Average propensity to consume is ______ at point B and average propensity to save is ______ at point A.
Average propensity to consume is ______ at point B and average propensity to save is ______ at point A.
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Solution
The correct option is D 1, 0
APC refers to Average Propensity to Consume which
defines the amount of consumption in every 1 rupee of income for all levels of
income and APS refers to Average Propensity to save which
defines the amount of savings in every 1 rupee of income for all levels of
income. At break-even point the
income=consumption due to which APC=1 and savings =0 due to which APS=0.
APC refers to Average Propensity to Consume which defines the amount of consumption in every 1 rupee of income for all levels of income and APS refers to Average Propensity to save which defines the amount of savings in every 1 rupee of income for all levels of income. At break-even point the income=consumption due to which APC=1 and savings =0 due to which APS=0.
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