If aggregate income is N500.00 and aggregate consumption is N400.00, this means that the average...
ECONOMICS
JAMB 2020
If aggregate income is N500.00 and aggregate consumption is N400.00, this means that the average propensity to consume is?
- A. 0.20
- B. 0.80
- C. 1.25
- D. 2.00
Correct Answer: B. 0.80
Explanation
The average propensity to consume (APC) measures the percentage of income that is spent rather than saved. The formular is gotten as: APC = C / DI Income = 500 consumption = 400 400/500 = 0.8
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