If income is $5,000 per month and consumption spending is $4,500 per month, what is the average propensity to consume?
A) -500
B) 0.9
C) 1.11
D) 500

Question

Quizplus · Accepted Answer

The average propensity to consume (APC) is calculated by dividing consumption spending by income. Therefore, APC = 4,500/5,000 = 0.9. Option B is the correct choice because it represents the correct calculation for the APC.

If Income Is $5,000 Per Month and Consumption Spending Is