Answer :
Value of APC can be greater than one. It happens when the level of income is low and C >Y.
Value of MPC cannot be greater than one. MPC is the ratio between additional consumption and additional income (∆C / ∆Y). Since additional consumption is only part of additional income, and after certain level of income is reached, people start saving a part of income.
Since increase in consumption (∆C) is less than that of increase in income (∆Y) the value of MPC must be less than one or cannot be greater than one.
Value of APC can be greater than one. It happens when the level of income is low and C >Y.
Value of MPC cannot be greater than one. MPC is the ratio between additional consumption and additional income (∆C / ∆Y). Since additional consumption is only part of additional income, and after certain level of income is reached, people start saving a part of income.
Since increase in consumption (∆C) is less than that of increase in income (∆Y) the value of MPC must be less than one or cannot be greater than one.
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