Question

The average propensity to consume is the: ratio of consumption to income. amount consumed out of an additional dollar of income. amount available for consumption after precautionary saving. ratio of consumption to wealth

Answer 1

The correct answer is: ratio of consumption to income.

Step-by-step explanation:

The average propensity to consume is a measure to show the percentage of income that is spent on consumption of goods and services. It is calculated by the ratio of consumption and income.

It can also be calculated as 1 - APS. Here, APS is the average propensity to consume which is the ratio of savings to income.