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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
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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 

 


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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC offline past questions - with all answers and explanations in one app - Download for free
WAEC offline past questions - with all answers and explanations in one app - Download for free
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709