Which of the following statements are true: (A). Average propensity to consume is the change in consumption per unit to change in income. Choose the correct answer from the options given below: |
(A), (B) and (D) only (A), (B) and (C) only (A), (B), (C) and (D) (B), (C) and (D) only |
(B), (C) and (D) only |
The correct answer is Option (4) → (B), (C) and (D) only (A). Average propensity to consume is the change in consumption per unit to change in income. (False). Average Propensity to Consume (APC) is defined as total consumption divided by total income (APC=C/Y). Marginal Propensity to Consume (MPC) is defined as the change in consumption per unit change in income (MPC=ΔC/ΔY). Therefore, statement (A) incorrectly defines APC; it describes MPC. |