If income is $35,000 and the average propensity to save is 0.46, what is consumption?
A) $15,500
B) $16,100
C) $18,900
D) $19,500

Question

Quizplus · Accepted Answer

The average propensity to save (APS) is the fraction of total income that is saved. If the APS is 0.46 on an income of $35,000, then savings amount to $35,000 * 0.46 = $16,100. Consumption is the remainder of income after savings, so it's $35,000 - $16,100 = $18,900.

If Income Is $35,000 and the Average Propensity to Save