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What Does Average Propensity To Consume Mean?

April 26, 2017average Consume mean propensity

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What Does Average Propensity To Consume Mean?

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The average propensity to consume (APC) refers to the percentage of income that is spent on goods and services rather than on savings. One can determine the percentage of income spent by dividing the average household consumption (what is spent) by the average household income (what is earned). The inverse of the average propensity to consume is the average propensity to save (APS).