Practicing Success
Find out correct one : (A) MPC is the change in consumption per unit change in income (B) MPS is the saving per unit of income (C) APC is the consumption per unit of income (D) APS is the change in saving per unit change in income Choose the correct answer from the options given below : |
(A) and (B) Only (A) and (C) Only (C) and (D ) Only (B) and (C) Only |
(A) and (C) Only |
The correct answer is option (2) : (A) and (C) Only (A) MPC is the change in consumption per unit change in income: This statement is correct. MPC (Marginal Propensity to Consume) measures the change in consumption when income changes by one unit. (B) MPS is the saving per unit of income: Incorrect. MPS (Marginal Propensity to Save) measures the change in saving when income changes by one unit, not saving per unit of income. (C) APC is the consumption per unit of income: This statement is correct. APC (Average Propensity to Consume) is the ratio of total consumption to total income, which gives consumption per unit of income. (D) APS is the change in saving per unit change in income: This statement is incorrect. APS (Average Propensity to Save) is the ratio of total saving to total income, not the change in saving per unit change in income. |