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JAMB Economics 1988 Question 42

Question 42

National Income

If aggregate income is N500.00 and aggregate consumption is N400.00, this means that the average propensity to consume is

  1. A.0.20
  2. B.0.80
  3. C.1.25
  4. D.2.00
Show the answer and explanation

Answer: B (0.80)

Explanation

APC = consumption ÷ income = 400 ÷ 500 = 0.80.