Question : Which of the following statement are true?

When consumption function is C=50+0.6Y, consumption is 140 when Y= 150.

When Saving function is S= -50+0.4Y, savings is 10 when Y= 150.

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?

When consumption function is C=50+0.6Y, consumption is 140 when Y= 150.
When Saving function is S= -50+0.4Y, savings is 10 when Y= 150.

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: Both are true.

Solution : APC is more than 1 before break-even point.
C=50+0.6(150)
C= 140
S=-50+0.4(150)
S= 10
Hence, Option A is correct.

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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?

When consumption function is C=40+0.8Y, savings will be equal to -40 at zero level of income.

As per above consumption function, MPS= 0.2

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?

If APC is 1.05 then APS would be positive.

MPC represents slope of the consumption function.

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.