Read the following statements - Assertion (A) and Reason (R)carefully and choose the correct alternative given below:
Assertion (A) :MPC is the consumption per unit of income.
Reason (R):MPC is denoted by c and is equal to ∆Y/ ∆C.
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: Both A and R are false
Assertion (A) :MPC is the consumption per unit of income. This is incorrect. MPC is the change in consumption per unit change in income. APC (not MPC) is the consumption per unit of income.
Reason (R):MPC is denoted by c and is equal to ∆Y/ ∆C. This is incorrect. MPC is denoted by c and is equal to ∆C/ ∆Y.