Question

What is meant by average propensity to consume?

Answer 1

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The inverse of the average propensity to consume is the average propensity to save .

The average propensity to consume (APC) refers to the percentage of income spent on goods and services rather than on savings. 





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Answer 2

•According to economics the meaning of average propensity to costume means fraction of the income spent.

•It is calculated by amount spent divided by income.

•It is sometimes also calculated as consumption divided by income also. average propensity constant is always greater than 1.

•When consumption is positive and income is more then the value will definitely be more than 1.