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Question
The assumption of “Constant marginal utility of money” means that importance of money to consumer is ______.
Options
Increasing
Decreasing
Same
None of these
MCQ
Fill in the Blanks
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Solution
The assumption of “Constant marginal utility of money” means that importance of money to consumer is same.
Explanation:
Constant marginal utility of money means each additional rupee is assumed to have the same importance to the consumer. Thus, its marginal utility does not rise or fall.
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