APC

APC therefore depends on the ratio of Yp to current income.

In the short run, if high current income temporarily rises above
permanent income, APC will fall as consumption increases only
with YP. Vice versa when current income temporarily falls
below permanent income, APC will be high.

APC is high when income is low and APC is low when income is high.
However, over a long period of time, changes in income
come from the permanent income component as transitory
income will tend to zero. Hence, in long run time series data,
APC will be stable.