Question

Identify the correctly matched pair from Column A to that of Column B:

Column A		Column B
(1)	Investment Multiplier	(a)	C + I + G + (X − M)
(2)	Marginal Propensity to Consume	(b)	`(ΔC)/(ΔY)`
(3)	Marginal  Propensity to Save	(c)	`(ΔI)/(ΔY)`
(4)	Aggregate Demand	(d)	`(ΔS)/(ΔY)`

Options

• 1 - (a)

• 2 - (b)

• 3 - (c)

• 4 - (d)

Answer 1

2 - (b)

Explanation:

The ratio of change in consumption owing to change in income is known as marginal propensity to consume.