Match List-I with List-II.
| List-I | List-II | ||
| (A) | Consumption function | (I) | \( \overline{C} + by \) |
| (B) | Saving function | (II) | C + I |
| (C) | AD | (III) | \( -\overline{C} + (1-b) y \) |
| (D) | AS | (IV) | C + S |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A)-(I), (B)-(III), (C)-(II), (D)-(IV)
In these functions, \( \overline{C} \) is autonomous consumption, the part that takes place even at zero income. The letter b is the marginal propensity to consume, and y is income.
| List-I | List-II | Reason |
|---|---|---|
| (A) Consumption function | (I) \( \overline{C} + by \) | Consumption is autonomous consumption plus the part that depends on income. |
| (B) Saving function | (III) \( -\overline{C} + (1-b) y \) | Saving is the part of income not consumed. S = y − C gives this form. |
| (C) AD | (II) C + I | In a two-sector economy, aggregate demand is consumption plus investment. |
| (D) AS | (IV) C + S | Aggregate supply equals the income it generates, and income is either consumed or saved. |
Note: A same/similar question was asked in CUET (UG) in the papers below.
| 2026 | 2025 | 2024 | 2023 | 2022 |
| – | – | – | 13-06 S3 16-06 S3 | – |
NCERT (2026-27): Introductory Macroeconomics — Chapter 4: Determination of Income and Employment
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