Question : Which of the following statement are true?
- If APC is 1.05 then APS would be positive.
- MPC represents slope of the consumption function.
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.
Answer (1)
24th Jan, 2024
Correct Answer:
Statement 1 is false, statement 2 is true.
Solution :
APC+APS=1 if APC is more than 1 then APS would be negative.
MPC represents change in consumption due to change in income. It shows the slope of consumption function.
Hence, Option D is correct.
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