Question

what is average propensity to consume ? ​

Answer 1

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In economics, the average propensity to consume is the fraction of income spent. It is computed by dividing consumption by income, or. Sometimes, disposable income is used as the denominator instead, so, where C is the amount spent, Y is pre-tax income, and T is taxes.

Answer 2

Answer:

The marginal propensity to save and the marginal propensity to consume are both measurements relative to the amount of expendable income in the budget of individuals and businesses alike. The measurement is also relative to a population as a whole and measuring against a population set reveals important data about consumer spending and savings that is valuable for industry and government data.