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Question : Which of the following statement are true?

  1. Equilibrium occurs when ex-ante savings is equal to ex-post savings.
  2. 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 2nd Jan, 2024
Answer (1)
Team Careers360 12th Jan, 2024

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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