Question

Sum of average propensity to consume and marginal propensity to consume is always equal to 1.
True/False.

Answer 1

False.

Sum of Average propensity to consume and marginal propensity to consume is never equal to 1 as APC refers to Average Propensity to Consume which defines the amount of consumption in every 1 rupee of income for all level of income where as the MPC i.e. Marginal Propensity to Consumer is percentage change in consumption when there is some change in the level of income.