ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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national income= consumption
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consumption = saving
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consumption= investment
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national income > consumption,
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Detailed explanation-1: -Break even point refers to the point where the income=consumption or savings= 0. It is the point where the consumption curve intersects the 45 degree line.
Detailed explanation-2: -At break even point, consumption is equal to national income. So, APC = 1. For example, consumption = ₹5, 000 crores and income = ₹5, 000. Therefore, APC = C/Y = ₹5, 000 crores/₹5, 000 crores= 1.
Detailed explanation-3: -The break-even point is the point at which total cost and total revenue are equal, meaning there is no loss or gain for your small business. In other words, you’ve reached the level of production at which the costs of production equals the revenues for a product.
Detailed explanation-4: -The consumption function uses gross national income as a component, which is the total amount of income earned by all participants in a nation’s economy.
Detailed explanation-5: -When consumption expenditure becomes equal to income and there is no saving, it is called breakeven point.