Macro

Income & Employment

Medium

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Calculate various parameters of Aggregate Demand, Aggregate Supply and related concepts

Income (in ₹ Crore)	Consumption (in ₹ Crore)
0	50
50	75
100	100
200	150
300	200
400	250

From the given table, identify the level of income, where Average Propensity to Save (APS) becomes zero:

100

200

✅ Correct Option: 2

Option 1: 50 -> At income 50, consumption exceeds income, resulting in dissaving (negative APS).

Option 2: 100 -> At income 100, savings is zero, making APS = 0 (break-even point).

Option 3: 200 -> At income 200, positive savings exist, so APS is positive.

Option 4: 0 -> At income 0, autonomous consumption causes dissaving (negative APS).

Hence, Option 2: 100 -> APS (Average Propensity to Save) = Savings/Income. At income level 100, this represents the break-even point where consumption exactly equals income, meaning savings = 0. Therefore, APS = 0/100 = 0. Below this income level, households dissave (negative APS), and above it, they save (positive APS). -> correct

Question 46

When income is more than consumption, then value of Average Propensity to Save (APS) is.

Question 47

When income is less than consumption, value of Average Propensity to Consume (APC) is.

Question 49

_____________ is the minimum level of consumption done at zero income level and is independent of income.

Question 50

Calculate Marginal Propensity to Save (MPS) and Average Propensity to Consume (APC) at income level of 200.

From the given table, identify the level of income, where Average Propensity to Save (APS) becomes zero:

Solution

More from this set:

Keyboard Shortcuts

CUET Economics Past Year Questions (Topic-Wise)