Kavita posted an Question
September 07, 2020 • 18:42 pm 5 points
  • UGC NET
  • Economics

Uily 14 if marginal propensity to consume (mpc) average propensity to consume (apc) for all levels then of income (y), the corresponding consunmption function w

UILy 14 If Marginal Propensity to Consume (MPC) Average Propensity to Consume (APC) for all levels then of Income (Y), the corresponding consunmption function will be (a) C= a+ bY lc) C=bY (b) C=bY (d) C = a +bY

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    Nidhi taparia best-answer

    The answer will be (b) C = bY. This is because when APC and MPC are equal, this means the consumption curve passes through the origin. The equation of such a curve is always of the form y = Ax.

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