If aggregate income is N500.00 and aggregate consumption is N400.00, this means that the average propensity to consume is?
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Correct Answer: Option B
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
\(\frac{400}{500}\) = 0.8
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
\(\frac{400}{500}\) = 0.8