Macro

Income & Employment

Easy

Match List-I with List-II

List-I List-II
(A) Marginal propensity to consume (I) Change in savings per unit change in income.
(B) Marginal propensity to save (II) Savings per unit of income.
(C) Average propensity to consume (III) Change in consumption per unit change in income.
(D) Average propensity to save (IV) Consumption per unit of income.

Choose the correct answer from the options given below:

List-I	List-II
(A) Marginal propensity to consume	(I) Change in savings per unit change in income.
(B) Marginal propensity to save	(II) Savings per unit of income.
(C) Average propensity to consume	(III) Change in consumption per unit change in income.
(D) Average propensity to save	(IV) Consumption per unit of income.

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (III), (B) - (I), (C) - (IV), (D) - (II)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

✅ Correct Option: 2

Option 2: (A) - (III), (B) - (I), (C) - (IV), (D) - (II) -> Let's understand the economic concepts:

(A) Marginal Propensity to Consume (MPC) = ΔC/ΔY = Change in consumption per unit change in income = (III). It measures how much additional consumption occurs when income increases by one unit.

(B) Marginal Propensity to Save (MPS) = ΔS/ΔY = Change in savings per unit change in income = (I). It measures how much additional savings occurs when income increases by one unit.

(C) Average Propensity to Consume (APC) = C/Y = Consumption per unit of income = (IV). It shows the proportion of total income that is consumed.

(D) Average Propensity to Save (APS) = S/Y = Savings per unit of income = (II). It shows the proportion of total income that is saved.

Note: MPC + MPS = 1 and APC + APS = 1 -> correct

2025: 27 May Shift 2

The equilibrium level of output may be more or less than the full employment level of output. If it is less than the full employment of output, it is due to the fact that demand is not enough to employ all factors of production. This situation is called ......

2026: 11 May Shift 2

Match the LIST-I with LIST-II

LIST-I	LIST-II
A. Marginal Propensity to Save (MPS)	I. Consumption per unit of income.
B. Average Propensity to Save (APS)	II. Savings per unit of income.
C. Marginal Propensity to Consume (MPC)	III. Change in consumption per unit change in income.
D. Average Propensity to Consume (APC)	IV. Change in savings per unit change in income.

Choose the correct answer from the options given below:

2022: 19 July Shift 2

In an economy, every time the National Income rises 20% of the rises in income is saved by households. Now suppose there is a rise in investment by $\overline{\mathbf{\tau}}$ 100 crores, then the National Income in this economy will rise by :

2023: 30 May Shift 1

Deficit Demand Occurs when :

(A) Equilibrium level of output is less than full employment level

(B) When AD < AS (Aggregate Demand less than Aggregate Supply)

(D) Demand is not enough to employ all factors of production

(E) Prices will decline in the long run

Choose the correct answer from the options given below :

2026: 21 May Shift 1

The ratio of the total increment in equilibrium value of final goods output to the initial increment in autonomous expenditure is called .......................

2022: 30 Aug Shift 2

Given the consumption function of an economy C = 200 + 0.25 Y, what is the value of slope of the savings function ?

Solution

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