Match List-I with List-II, using the intercept form of the linear equation, Y = a + bX, and the consumption function C = C̄ + cY:
| List-I | List-II | ||
|---|---|---|---|
| (A) | a | (I) | Intercept of the consumption function |
| (B) | b | (II) | Value of Y when X is zero |
| (C) | C̄ | (III) | Slope of the consumption function, equal to tan α |
| (D) | c | (IV) | Slope of the line, equal to tan θ |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A) - (II), (B) - (IV), (C) - (I), (D) - (III)
In Y = a + bX, a is where the line cuts the Y-axis and b is its slope. The consumption function C = C̄ + cY is the same kind of line.
| List-I | List-II | Reason |
|---|---|---|
| (A) a | (II) Value of Y when X is zero | The constant a is the intercept on the Y-axis: the value of Y when X is zero. |
| (B) b | (IV) Slope of the line, equal to tan θ | The constant b is the slope of the line: tan θ = b. |
| (C) C̄ | (I) Intercept of the consumption function | C̄ is the consumption at zero income, where the line starts on the vertical axis. |
| (D) c | (III) Slope of the consumption function, equal to tan α | c, the MPC, is the slope of the consumption line, tan α. |
NCERT (2026-27): “4.3.1 Macroeconomic Equilibrium with Price Level Fixed … Here, the variables are X and Y and there is a linear relation between them. a and b are constants. This equation is depicted in figure 4.1. The constant ‘a’ is shown as the ‘intercept’ on the Y axis, i.e, the value of Y when X is zero. The constant ‘b’ is the slope of the line i.e. tangent θ = b.” “Consumption Function – Graphical Representation Using the same logic, the consumption function can be shown as follows: Consumption function, where, C̄ = intercept of the consumption function c = slope of consumption function = tan α …” |