Average propensity to consume
From Wikipedia, the free encyclopedia
Average propensity to consume (APC) is the percentage of income spent. To find the percentage of income spent, one needs to divide consumption by income, or 
. In an economy which each individual consumer saves lots of money, there is a tendency of people losing their jobs because demand for goods and services will be low. Thus saving as a leakage is an advantage from the savers' point of view, while for the economy as a whole it is a considerable disadvantage.
Sometimes, disposable income is used as the denominator instead, so 
.
The inverse is the average propensity to save (APS).
[edit] See also
 |
This economics or finance-related article is a stub. You can help Wikipedia by expanding it. |
