Question

If the value of Average Propensity to Save (APS) is 0.2 and National Income is ₹4,000 crores, then consumption will be ______

Options

• ₹4,000 crores

• ₹3,200 crores

• ₹3,800 crores

• ₹2,600 crores

Answer 1

₹3,200 crores

Explanation:

APS = `"S"/"Y"`

0.8 = `"S"/4,000`

S = ₹800 crores

C = Y − S

= ₹4000 − ₹800

= ₹3,200 crores