sum of APC and MPC is always equal to 1. – InterviewSolution

InterviewSolution

1.	sum of APC and MPC is always equal to 1.
Answer» Correct Answer - False as APC is ratio of consumption and income whereas MPC is the ratio of change in consumption `(Delta C)` due to change in income . `(Delta Y)`

Discussion

No Comment Found

Related InterviewSolutions

can consumption exceed income ? If yes , what is saving then?
What is the defference between voluntary unemployment and involuntary unemployment ? State the significance of this distinction .
Give meaning of involuntary unemployment .
if planned saving are greater than planned investment , what will be its effect our inventories ?
Underemployment equilibrium indicates excess supply in the economy
what is equilibrium output ?
break - even point is struck when saving is equal to zero .
Although propensity to consume is fairly high in india yet manufacturing sector india shows a low rate of growth due to low demand , why is it so ?
give menings of (i) Ex- ante saving ,(ii) ex-ante investment ,(iii) ex- ante consumption and (ic) Ex- ante aggregate demand .
what happens to the demand for credit in the economy when repo rate is increased ?