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Question
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:
Options
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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Solution
Both statements 1 and 2 are true
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