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State with Reason Whether You Agree Or Disagree with the Following Statement. Savings Are Negative before Break-even Point. - Economics

Answer in Brief

State with reason whether you agree or disagree with the following statement.

Savings are negative before break-even point.

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Solution

The above statement is correct. Breakeven point is achieved where consumption exactly equals income and correspondingly, savings are zero. Below this point consumption exceeds income. In such a situation consumption is financed by drawing from past savings, that is the savings are negative.

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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 10 Determinants of Aggregates
Exercise | Q 1.5 | Page 94
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