C= -c+b(Y) is a
What does the term ceteris paribus mean?
The level of equilibrium income is determined by
The level of equilibrium income is also determined by
Multiplier tells us what will be the
Autonomous consumption is assumed to be at
APC= 1-APS. It is
APC + APS = 1 because income is either used for consumption or for saving.
APS= 1+APC. It is
MPC+MPS should always be equal to 1
MPS= 1+MPC. It is
Since MPS is measured as ratio of change in savings to change in income, its value lies between 0 and 1. Also, marginal propensity to save is opposite of marginal propensity to consume. Mathematically, in a closed economy, MPS + MPC = 1, since an increase in one unit of income will be either consumed or saved.
The saving is negative at
The value of APS can be negative when
Between APS and MPS, the value of APS can be negative when consumption expenditure becomes higher than income.
The coefficient (1-b) measures the
If income is Rs 1000 and consumption expenditure is Rs 200, APS will be
The ratio of total saving to total income is called APS.
APS = 800/1000
If APC is 0.7 then APS will be
The important factor influencing the propensity to consume in an economy is
The important factor influencing the propensity to save in an economy is
The savings function derived from the consumption function c=-a+by is
The correct option is B.
The Consumption function is a+bY and not -a+bY
We know, Y=C+S
S= Y - C
The slope of the saving function gives the
The coefficient (1-b) is also known as