Question

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. (Choose the correct option to fill up the blank)

• A. 100
• B. 200
• C. 500
• D. 800

Hint:

Saving = National Income – Consumption; Consumption = APC × National Income.

Answer 1

The Correct Option is B

Given: \[ APC = 0.8, \ Y = ₹ 4000 \ \text{crores} \] Consumption (C) = \( 0.8 \times 4000 = ₹ 3200 \ \text{crores} \) Saving (S) = \( Y - C = 4000 - 3200 = ₹ 800 \ \text{crores} \) Hence, saving is ₹ 800 crores. Correction to options: The correct answer should be (D) 800.