Match List-I with List-II:List-IList-II(A)MPC = 0(I)0.2(B)MPC = 1(II)…

Match List-I with List-II:

List-I		List-II
(A)	MPC = 0	(I)	0.2
(B)	MPC = 1	(II)	Consumers use the entire change in income on consumption
(C)	0 < MPC < 1	(III)	Consumers do not change consumption at all when income changes
(D)	MPS when the MPC is 0.8	(IV)	Consumers use a part of the change in income for changing consumption

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → (A) - (III), (B) - (II), (C) - (IV), (D) - (I)

The MPC tells how much of a change in income is used for consumption. It can be 0, 1 or anything between, and MPS = 1 − MPC.

List-I	List-II	Reason
(A) MPC = 0	(III) Consumers do not change consumption at all when income changes	MPC = 0: consumption does not change at all when income changes.
(B) MPC = 1	(II) Consumers use the entire change in income on consumption	MPC = 1: the whole change in income goes into consumption.
(C) 0 < MPC < 1	(IV) Consumers use a part of the change in income for changing consumption	Only a part of the change in income is consumed.
(D) MPS when the MPC is 0.8	(I) 0.2	MPS = 1 − 0.8 = 0.2.

NCERT (2026-27): “4.1.1 Consumption … Now, let us look at the value that MPC can take. When income changes, change in consumption ( ΔC ) can never exceed the change in income ( Δ Y) . The maximum value which c can take is 1. On the other hand consumer may choose not to change consumption even when income has changed. In this case MPC = 0. Generally, MPC lies between 0 and 1 (inclusive of both values). This means that as income increases either the consumers does not increase consumption at all (MPC = 0) or use entire change in income on consumption (MPC = 1) or use part of the change in income for changing consumption (0< MPC<1).”

“Some Definitions Marginal propensity to save (MPS): it is the change in savings per unit change in income. It is denoted by s and is equal to 1 − c. It implies that s + c = 1.”