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Alternate Measures of Poverty

When consumpt...

Question

When consumption expenditure is equal to income, saving is zero.

A

True

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B

False

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Solution

The correct option is A True
In macroeconomics , income= consumption + savings.Therefore when consumption expenditure is equal to income, savings is zero.

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Q. The consumption function is expressed as: C = 100 + 0.25 Y (where C = consumption expenditure and Y = National Income). Calculate saving if consumption expenditure at equilibrium level of national income is Rs. 500 crores. (Saving = Rs. 1,100 cores)

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