-Use the above table. We can infer from the table that when real disposable income is $175
A) APC = 0.91.
B) APC = 0.80.
C) APC = 0.20.
D) APC = 0.09.

Question

-Use the above table. We can infer from the table that when real disposable income is $175
A) APC = 0.91. 
B) APC = 0.80. 
C) APC = 0.20. 
D) APC = 0.09.

Quizplus · Accepted Answer

APC (Average Propensity to Consume) is calculated by dividing consumption by disposable income. Without the specific table, a general understanding is that if APC is 0.91 when real disposable income is $175, it means that 91% of the disposable income is being consumed. This is a plausible figure for APC, indicating a high propensity to consume out of the available income.

-Use the Above Table