Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

Which of the following statements is true?

Statement 1- MPC of a developed country is more than the MPC of developing country.

Statement 2- Developed country needs to spend more on basic needs than the developing country.

Options:

Only statement 1 is true

Only statement 2 is true

Both statement 1 and statement 2 are true

Neither statement 1 nor statement 2 is true

Correct Answer:

Neither statement 1 nor statement 2 is true

Explanation:

MPC of a developing countries is more than MPC of a developed country as developing countries needs to spend more on the basic needs than the developed countries. It is also said that MPC of poor is more than MPC of rich, as poor person needs to spend more on basic necessities.