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Question
What is average propensity to consume? How is it calculated?
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Solution
APC refers to Average
Propensity to Consume which defines the amount of consumption in every one rupee of
income for all levels of income. It is the ratio between the consumption and income in the economy at a given point of time.
Average propensity to consume= Consumption/ Income.
APC refers to Average Propensity to Consume which defines the amount of consumption in every one rupee of income for all levels of income. It is the ratio between the consumption and income in the economy at a given point of time.
Average propensity to consume= Consumption/ Income.
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