Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

Which of the following option's value can be greater than 1?

Options:

1 - MPC

1 - MPS

1 - APS

1 - APC

Correct Answer:

1 - APS

Explanation:

1 - MPC = MPS, 

1 - MPS = MPC, 

1 - APS = APC and

 1 - APC = APS.

Out of all, the value of APC can be greater than 1 as consumption can never be zero due to presence of autonomous consumption in the economy. 

Autonomous consumption is defined as the expenditures that consumers must make even when they have no disposable income.