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Question : Read the following statements of
Assertion (A) and Reason(R) and choose the correct alternative:

Assertion (A)- Saving curve will have a negative intercept on Y-axis of the same magnitude as the consumption curve has positive intercept on Y-axis.

Reason(R)- If consumption is positive at Y=0, there would be dissavings of the same mangnitude.

Option 1: Both A and R are correct and R is correct explanation
 

Option 2: A is correct and R is wrong.

Option 3: R is correct and A is wrong 
 

Option 4: Both A and R are correct and R is not the correct explanation of A.


Team Careers360 17th Jan, 2024
Answer (1)
Team Careers360 18th Jan, 2024

Correct Answer: Both A and R are correct and R is correct explanation
 


Solution : The saving curve will have a negative intercept on Y-axis of the same magnitude as the consumption curve has positive intercept on the X-axis. It happens because it consumption is positive is zero level of income then they would be savings of the same magnitude.
Hence, Option A is correct.

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