ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Average propensity to consume can never be zero The only possible way for APC to be zero is when consumption becomes zero. However, this is impossible because the consumption function includes autonomous consumption (Ca), which is always positive.

Detailed explanation-2: -Average propensity to consume (APC) measures the percentage of income that is spent rather than saved. This may be calculated by a single individual who wants to know where the money is going or by an economist who wants to track the spending and saving habits of an entire nation.

Detailed explanation-3: -The value of APC can be greater than one. It happens when the level of income is low and C>Y. The value of MPC cannot be greater than one. MPC is the ratio of additional consumption to additional income (CY).

Detailed explanation-4: -(c) The value of APC varies from 1 to infinity.