Author Question: The average propensity to consume (APC) equals A) the change in consumption expenditures divided ... (Read 97 times)

ashley · **on:** Jun 30, 2018

The average propensity to consume (APC) equals

A) the change in consumption expenditures divided by the change in real disposable income.
B) real disposable income divided by consumption expenditures.
C) the change in real disposable income divided by the change in consumption expenditures.
D) consumption expenditures divided by real disposable income.

Question 2

Consider two countries: A and B. In country A, the annual growth rate of GDP per capita is 2, while in country B the annual growth rate of GDP per capita is 6. At present, country B's GDP per capita is higher than country A's GDP per capita.

Which of the following statements will then be true?
A) The gap between country A's GDP per capita and country B's GDP per capita will decrease for the first few years and then will increase later.
B) The gap between country A's GDP per capita and country B's per capita will decrease over time.
C) The gap between country A's GDP per capita and country B's per capita will widen over time.
D) The gap between country A's GDP per capita and country B's per capita will remain the same.