QuestionJuly 16, 2025

The average propensity to consume is thé A. slope of the consumption function. B. percentage of total disposable income consumed. C. rate at which real disposable income changes as autonomous consumption changes. D. ratio of changes in planned consumption to changes in real disposable income.

The average propensity to consume is thé A. slope of the consumption function. B. percentage of total disposable income consumed. C. rate at which real disposable income changes as autonomous consumption changes. D. ratio of changes in planned consumption to changes in real disposable income.
The average propensity to consume is thé
A. slope of the consumption function.
B. percentage of total disposable income consumed.
C. rate at which real disposable income changes as autonomous consumption changes.
D. ratio of changes in planned consumption to changes in real disposable income.

Solution
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Answer

B. percentage of total disposable income consumed. Explanation 1. Identify the definition of average propensity to consume The average propensity to consume (APC) is defined as the fraction of total disposable income that is consumed. 2. Match the definition with the options Option B matches this definition, as it describes APC as the percentage of total disposable income consumed.

Explanation

1. Identify the definition of average propensity to consume<br /> The average propensity to consume (APC) is defined as the fraction of total disposable income that is consumed.<br /><br />2. Match the definition with the options<br /> Option B matches this definition, as it describes APC as the percentage of total disposable income consumed.
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