Question

In a country, consumption amount is Rs. 900 crore which is 90 percent of its total disposable income. What is the amount of disposable income?

• A. Rs 8,100 crore
• B. Rs 810 crore
• C. Rs 1000 crore
• D. Rs 100 crore

Answer 1

Answer: (C)

Rs 1000 crore

Here APC = 90% or 0.6, C = 9,000
Since, APC = $\frac{C}{Y}$,
Y = $\frac{C}{APC}$ .
where, Y = Disposable income,
and C = Consumption
Y = $\frac{900}{0.9}$ $=\text{1,000 crore}.$