what is average propensity to consume 
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 in either case the propensity to consume can be determined by dividing average household consumption or spending by average household income or earnings understanding average propensity to consumefrom the broader economic view a high average propensity to consume is generally good for the economy when the average propensity to consume is high consumers are saving less and spending more on goods or services this increased demand drives economic growth business expansion and broad employment low income households are often seen as having a higher average propensity to consume than high income households low income households may be forced to spend their entire income on necessities with minimal disposable income remaining to save alternatively high income households with higher cash flow after their necessities are met typically have a relatively lower average propensity to consume economists often gauge economy forecasts on actions by the middle income households the spending and savings patterns of this demographic often indicate a degree of confidence or pessimism about their own personal financial situations and the economy as a whole 