If APC of an economy is 0.6, what should

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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

If APC of an economy is 0.6, what should be the savings when an income level is Rs 2000 crore?

Options:

800

400

200

100

Correct Answer:

800

Explanation:

The correct answer is Option 1: 800

If APC = 0.6,

then APS = 0.4,

as APS + APC = 1

APS = $\frac{Savings}{Income}$

0.4 = $\frac{Savings}{2000}$

Savings = 800