The average propensity to consume is the fraction of total disposable income that households spend on consumption (as opposed to saving for example) whereas marginal propensity to consume is the...
average propensity to consume is the fraction of the total amount of disposable income that households spend on consumption whereas marginal propensity to consume is the amount that consumption...
we do care about the marginal propensity to consume because it shows the ratio of an increase in consumption due to increase in income it does not matter what the income of the consumer,either high...
If
disposable income Yd desired consumption "C" average propensity to
consume APC=
C/Yd
--------------------------- ----------------------------- ---------------------------
o 100
100 180...