If, in an economy, income is ₹ 250 crores and savings are ₹ 150 cores, calculate Average Propensity to Consume.
Answer & explanation
Correct answer: option 2
The correct answer is Option 2: 0.4
Consumption = Income – savings
Consumption = 250 – 150 = 100
APC = \(\frac{Consumption }{ Income}\)
APC = \(\frac{100 }{250 }\)
APC = 0.4