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Kitty [74]
1 year ago
6

this is the percentage of each dollar of income, on average, that is spent for current needs and wants, rather than saved.

Business
1 answer:
Finger [1]1 year ago
7 0

Average propensity to consume (APC) counts how much money is spent each year versus saved.

What is Average propensity to consume (APC)?

Average propensity to consume (APC) counts how much money is spent each year versus saved. This might be done by a single person who is curious about where their money is going or by an economist who is interested in tracking the spending and saving patterns of a whole country. In all scenarios, the tendency to consume can be calculated by dividing average household spending by average household income. A high average propensity to consume is typically advantageous for the economy from a larger economic perspective. When customers have a high propensity to consume, they save less and spend more on products and services. This rising demand fuels economic development, corporate growth, and widespread employment.

To learn more about Average propensity to consume (APC)
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