Question

In a country, consumption amount is Rs. 7,200 crore which is 60 per cent of its total disposable income. What is the amount of disposable income?

• A. Rs 4,320 crore
• B. Rs 12,000 crore
• C. Rs 43,200 crore
• D. Rs 1,200 crore

Answer 1

Answer: (B)

Rs 12,000 crore

Here APC = 60% or 0.6, C = 7,200
Since, APC = $\frac{C}{Y}$,
Y = $\frac{C}{APC}$ .
where, Y = Disposable income,
and C = Consumption
Y = $\frac{7200}{0.6}$ $=\text{12,000 crore}.$