CBSE 2023 Class 12 Economics Outside Delhi Set 1

Question : 10

Total: 52

Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): At the break-even level of income, the value of Average Propensity to Consume (APC) is zero.
Reason (R): Sum of Average Propensity to Consume (APC) and Average Propensity to Save (APS) is always equal to one.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true, but Reason (R) is false.
Assertion (A) is false, but Reason (R) is true.

Solution:

Assertion (A) is false, but Reason (R) is true.
Explanation: At Break-even level of Income, Consumption equals Income. Here, APC=1. Sum of APC and APS is 1 as whole income is either consumed or saved.

Go to Question:

Prev Question

Next Question