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- Ex-ante savings refers to the amount of savings which is planned to be saved at different levels in an economy.

Statement 2- Break even point refers to the point at which consumption is equal to the marginal propensity to consume.

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:

Only statement 1 is true

Explanation:

Break-even point refers to the point at which consumption is equal to income i.e. savings are zero.