ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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MPC + APC = 1
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TRUE
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FALSE
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -MPC + MPS = 1, it can never be greater than or less than 1.
Detailed explanation-2: -The value of APC can be greater than one. It happens when the level of income is low and C>Y. The value of MPC cannot be greater than one.
Detailed explanation-3: -MPS can be equal to one when entire additional income is saved. However, APS can never be equal to one as savings can never be equal to income.
There is 1 question to complete.