The average propensity to consume (APC) is calculated as:
(a) Consumption spending divided by aggregate demand;
(b) National income divided by the level of consumption spending;
(c) Consumption spending divided by the level of national income;
(d) Consumption spending divided by the level of savings.
Answer: (c) Consumption spending divided by the level of national income;
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Fill in the blank(s) with the appropriate word(s).
Assume equilibrium real GDP per year is equal to full-employment real GDP. If aggregate demand falls, then
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