The concept of 'Average Propensity to Consume' is defined as:
A. Total saving divided by total income
B. Change in consumption divided by change in income
C. Change in saving divided by change in income
D. Total consumption divided by total income
Answer: Option D
Solution (By JKSSB Mock Tests)
Average Propensity to Consume (APC) = Total Consumption / Total Income. Marginal Propensity to Consume is the change in consumption divided by the change in income.
Explanation:
The disposition effect is the empirical regularity that investors are more likely to realise gains than losses, consistent with prospect-theory value functions and the reluctance to admit mistakes.
Explanation:
The Easterlin Paradox observes that, while richer individuals within a country tend to report higher happiness, average national happiness does not increase systematically as national income grows over the long run.
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