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Which of the following statements are true:

(A) Average propensity to consume is the change in consumption per unit to change in income.

(B) Ex-ante depicts what has been planned.

(C) Ceteris paribus means 'other things remain equal'.

(D) Ex-post depicts what has actually happened.

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 4

Option 1 -> Incorrect. Statement (A) is false as it describes MPC, not APC.

Option 2 -> Incorrect. Statement (A) is false as it describes MPC, not APC.

Option 3 -> Incorrect. Statement (A) is false as it describes Marginal Propensity to Consume.

Option 4 -> Correct. Statements (B), (C), and (D) are all true while (A) is false.


Hence, Option 4: (B), (C) and (D) only -> Statement (A) is FALSE because it describes Marginal Propensity to Consume (MPC = ΔC/ΔY), not Average Propensity to Consume (APC = C/Y which is the ratio of total consumption to total income). Statement (B) is TRUE as ex-ante means planned or anticipated values. Statement (C) is TRUE as ceteris paribus is a Latin phrase meaning 'other things remaining constant'. Statement (D) is TRUE as ex-post refers to actual or realized values after an event has occurred. Therefore, only statements (B), (C), and (D) are correct. -> correct

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