Question : Which of the following statement are true?

Equilibrium occurs when ex-ante savings is equal to ex-post savings.

When income rises, APC falls but at a rate less than that of MPC.

Option 1: Both are true.
Option 2: Both are false.
Option 3: Statement 1 is true, statement 2 is false.
Option 4: Statement 1 is false, statement 2 is true.

Question

Question : Which of the following statement are true?

Equilibrium occurs when ex-ante savings is equal to ex-post savings.
When income rises, APC falls but at a rate less than that of MPC.

Option 1: Both are true.

Option 2: Both are false.

Option 3: Statement 1 is true, statement 2 is false.

Option 4: Statement 1 is false, statement 2 is true.

Team Careers360 · Accepted Answer

Correct Answer: Statement 1 is false, statement 2 is true.

Solution : Equilibrium occurs when ex-ante savings is equal to ex-ante investment.
When income rises, APC falls but at a rate less than that of MPC.

Hence, Option D is correct.

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Related Questions

Question : Which of the following statement are true? Slope of consumption curve is indicated by APC. According to Keynesian theory of employment, Ex-ante savings and ex-post savings are always equal.

Question : Which of the following statement are true? Ex-ante savings includes both land as well as unplanned savings. Ex-post investment means fixed capital with production unit during a particular period of time.

Question : Which of the following statement are true? If APC is 1.05 then APC will be -0.05. When consumption function is C=60+0.6Y, savings are -60 at Y=0.

Question : Which of the following statement are true? APC can be more than one. APC+APS =1 always.

Question : Which of the following statemenst are true? If MPC and MPS are equal, the value of multiplier is 2. If investment multiplier is 1, the value of MPC is zero.

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Question : Which of the following statement are true?

Slope of consumption curve is indicated by APC.

According to Keynesian theory of employment, Ex-ante savings and ex-post savings are always equal.

Question : Which of the following statement are true?

Ex-ante savings includes both land as well as unplanned savings.

Ex-post investment means fixed capital with production unit during a particular period of time.

Question : Which of the following statement are true?

If APC is 1.05 then APC will be -0.05.

When consumption function is C=60+0.6Y, savings are -60 at Y=0.

Question : Which of the following statement are true?

APC can be more than one.

APC+APS =1 always.

Question : Which of the following statemenst are true?

If MPC and MPS are equal, the value of multiplier is 2.

If investment multiplier is 1, the value of MPC is zero.