Practicing Success

Target Exam

CUET

Subject

General Test

Chapter

General Knowledge

Question:

Consider the given consumption function of country X and answer the following question.

C = 100 + 0.8Y

What is the value of autonomous consumption (A) and marginal propensity to consume (MPC) in the given equation?

Options:

A = 0.8, MPC = 100

A = 100, MPC = 80

A = 80, MPC = 0.10

A = 100, MPC = 0.8

Correct Answer:

A = 100, MPC = 0.8