Question
Choose the correct answer:
When income increases, the consumption expenditure _________.
(a) increases
(b) decreases
(c) becomes equal
(d) becomes zero
(b) decreases
(c) becomes equal
(d) becomes zero
Solution
When income increases, the consumption expenditure increases.
Explanation:
Consumption expenditure refers to the total expenditure incurred by all the households in an economy on different types of goods and services in order to satisfy their wants. It shares a positive relationship with income, i.e., as income increases, the consumption expenditure also increases.
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Solution Choose the Correct Answer: When Income Increases, the Consumption Expenditure _.(A) Increases(B) Decreases(C) Becomes Equal(D) Becomes Zero Concept: Concept of National Income.
