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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:
पर्याय
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
What is marginal propensity to consume?
Given the following data, find the missing value of 'Government Final Consumption Expenditure' and 'Mixed Income of Self Employed'.
| S.No. | Particulars | Amount (In ₹ crores) |
| (i) | National Income | 71,000 |
| (ii) | Gross Domestic Capital Formation | 10,000 |
| (iii) | Government Final Consumption Expenditure | ? |
| (iv) | Mixed Income of Self Employed | ? |
| (v) | Net Factor Income from Abroad | 1,000 |
| (vi) | Net Indirect Taxes | 2,000 |
| (vii) | Profits | 1,200 |
| (viii) | Wages & Salaries | 15,000 |
| (ix) | Net Exports | 5,000 |
| (x) | Private Final Consumption Expenditure | 40,000 |
| (xi) | Consumption of Fixed Capital | 3,000 |
| (xii) | Operating Surplus | 30,000 |
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:
At the break-even point level of incomes for the economy is ₹ 10,000 crores and if the people tends to save 20 per cent of their additional income, then calcualte the value of autonomous consumption.
If in an economy, the Investment Multiplier is 4 and Autonomous Consumption is ₹ 30 crore, the relevant consumption function would be ______.
In an economy, the value of Marginal Propensity to Save (MPS) is 0.25, what will be the value of increase in income, if investments increased by ₹ 200 crores?
What does the consumption function show?
At zero income, what happens to consumption?
How does the consumption curve begin and move as income changes?
What is autonomous consumption?
Which formula correctly defines Marginal Propensity to Consume (MPC)?
Which formula correctly defines Marginal Propensity to Save (MPS)?
If \[MPC=0.8\], what is MPS?
What does it mean when the consumption curve is below the 45° line?
For the consumption function \[C=100+0.8Y\], what is autonomous consumption?
