Commerce Exam > Commerce Questions > Directions : In the following questions, a ...
Start Learning for Free
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): The minimum value of investment multiplier is equal to one.
Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false.
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Directions : In the following questions, a statement of Assertion (A...
Assertion (A): The minimum value of investment multiplier is equal to one.
Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.
The correct answer is option 'A' which states that both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Explanation:
Investment multiplier is a measure of the change in national income resulting from a change in investment. It shows how much the national income will increase for a given change in investment, and it depends on the marginal propensity to consume (MPC).
The MPC refers to the proportion of additional income that individuals choose to spend rather than save. It is a key determinant of the investment multiplier. If the MPC is higher, the investment multiplier will be higher, and vice versa.
Minimum value of investment multiplier:
The minimum value of investment multiplier occurs when the MPC is 0. This means that individuals do not spend any additional income and save it all. In this case, the investment multiplier will be equal to 1.
Explanation of Reason (R):
The reason given in Reason (R) is correct. The MPC can never be negative because it represents the proportion of additional income that individuals choose to spend rather than save. It ranges from 0 to 1, where 0 represents saving all additional income and 1 represents spending all additional income.
When the MPC is 0, it means that individuals save all additional income, and there is no increase in consumption. In this case, the investment multiplier will be 1 because there is no multiplier effect on national income.
Therefore, the minimum value of investment multiplier is indeed 1 when the MPC is 0, and the MPC can never be negative.
Conclusion:
Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A). The minimum value of investment multiplier is equal to one when the MPC is 0, and the MPC can never be negative.
Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.
The correct answer is option 'A' which states that both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Explanation:
Investment multiplier is a measure of the change in national income resulting from a change in investment. It shows how much the national income will increase for a given change in investment, and it depends on the marginal propensity to consume (MPC).
The MPC refers to the proportion of additional income that individuals choose to spend rather than save. It is a key determinant of the investment multiplier. If the MPC is higher, the investment multiplier will be higher, and vice versa.
Minimum value of investment multiplier:
The minimum value of investment multiplier occurs when the MPC is 0. This means that individuals do not spend any additional income and save it all. In this case, the investment multiplier will be equal to 1.
Explanation of Reason (R):
The reason given in Reason (R) is correct. The MPC can never be negative because it represents the proportion of additional income that individuals choose to spend rather than save. It ranges from 0 to 1, where 0 represents saving all additional income and 1 represents spending all additional income.
When the MPC is 0, it means that individuals save all additional income, and there is no increase in consumption. In this case, the investment multiplier will be 1 because there is no multiplier effect on national income.
Therefore, the minimum value of investment multiplier is indeed 1 when the MPC is 0, and the MPC can never be negative.
Conclusion:
Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A). The minimum value of investment multiplier is equal to one when the MPC is 0, and the MPC can never be negative.
Free Test
| FREE | Start Free Test |
Community Answer
Directions : In the following questions, a statement of Assertion (A...
K = 1/1 – MPC
= 1/1 – 0 = 1
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?
Question Description
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The minimum value of investment multiplier is equal to one.Reason (R): The minimum value of investment multiplier is 1, when MPC is 0 and MPC can never be negative.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup