What will be the value of consumption if

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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

What will be the value of consumption if the value of APS = 0.3, national income is Rs 5,000 crore ?

Options:

2500

1500

7500

3500

Correct Answer:

3500

Explanation:

APS = 0.3, as, APS = 1 - APC, then APC = 0.7

APC = \(\frac{C }{Y }\)

0.7 = \(\frac{C }{5,000 }\)

C = 0.7 * 5000

C = 3500