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Nilanjan Bhowmick AIR 3, CSIR NET (Earth Science)
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57. ifthe consumption curve is drawn through the origin (1) consumption ad income are the samde (2) the marginal propensity to comsume is equal to average prope
57. Ifthe consumption curve is drawn through the origin (1) Consumption ad income are the samDe (2) The marginal propensity to comsume is equal to Average propensity to Consume (3) The marginal propensity to consume will decroase as incame increases (4) Autonomous consumption is positive 58. Which of the following would increase the vałoe-of. the simple spending multiplier? (1) An fnerease in govement ependiture (2) An increase in exports (3) A deereaßvin govermmoend unenployment beneffts (4) A decrease in the marginal propensity to save
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Nidhi taparia Best Answer
57. The correct answer is (2). When consumption curve begins from the origin, it means APC = MPC. But this is true only if the consumption curve is linear. 58. The correct answer is (4). MPS and the value of multiplier are indirectly related to each other. As MPS rises, MPC falls and so does multiplier k. In fact, k = 1/MPS