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Questions
If the value of Average Propensity to Consume (APC) is 0.8 and National Income is ₹4,000 crores, the value of savings will be ______.
Suppose the value of Average Propensity to Consume (APC) is 0.8 and National Income is ₹4,000 crores; the value of saving would be ₹ ______ crores.
Options
₹100 crores
₹200 crores
₹800 crores
₹500 crores
Solution
If the value of Average Propensity to Consume (APC) is 0.8 and National Income is ₹4,000 crores, the value of savings will be ₹800 crores.
Explanation:
APC = `"C"/"Y"`
0.8 = `"C"/(₹4000)`
C = ₹3,200 crores
S = Y − C
= ₹4,000 − ₹3,200
= ₹800 crores
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