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प्रश्न
Statement 1: Consumption function assumes that, consumption changes at a constant rate as income changes.
Statement 2: Autonomous consumption is the ratio of total consumption (C) to total income (Y).
In light of the given statements, choose the correct alternative from the following:
विकल्प
Statement 1 is true, and Statement 2 is false.
Statement 1 is false, and Statement 2 is true.
Both Statements 1 and 2 are true.
Both Statements 1 and 2 are false.
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उत्तर
Statement 1 is true, and Statement 2 is false.
Explanation:
Statement 1 is true because the linear consumption function assumes that consumption changes at a constant rate with changes in income, represented by the Marginal Propensity to Consume (MPC). Statement 2 is false because `C/Y` is the Average Propensity to Consume (APC), whereas autonomous consumption is the consumption that occurs even when income is zero.
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संबंधित प्रश्न
State the meaning of the following:
Autonomous Consumption
In equation C = a + by, the value of b lies between ______.
Final goods refer to those goods which are used either for ______ or for ______.
Consumption depends on ______
Which of the following statements is true?
Read the following statements carefully:
Statement 1: The consumption curve is an upward sloping straight line curve due to the direct relationship between income and consumption and the assumption of constant Marginal Propensity to Consume.
Statement 2: Aggregate Demand curve and Consumption curve are parallel to each other.
In the light of the given statements, choose the correct alternative from the following:
Read the following statements carefully:
Statement 1: The induced consumption shows, the direct relation between consumption and income.
Statement 2: With a certain increase in income, induced consumption also increases.
In the light of the given statements, choose the correct alternative from the following:
What does the consumption function show?
How does the consumption curve begin and move as income changes?
What is induced consumption?
Which formula correctly defines Marginal Propensity to Consume (MPC)?
Within which range does the value of MPC always lie?
What does \[APC=\frac{C}{Y}\] measure?
What does it mean when the consumption curve is above the 45° line?
