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Question : Which of the following statements are correct?

  1. Consumption function refers to functional relationship between consumption and savings.
  2. It is a psychology concept as it is influenced by the subjective factors like consumers, taste preference, etc.
  3. It also shows the consumption level at different levels of income.
  4. C=f(Y)

 

Option 1: 1,2&3
 

Option 2: 2,3&4
 

Option 3: 1,3&4
 

Option 4: Only 3&4
 


Team Careers360 24th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: 2,3&4
 


Solution : The important points are-

  1. Consumption function refers to functional relationship between consumption and income.
  2. It is a psychology concept as it is influenced by the subjective factors like consumers, taste preference, etc.
  3. It also shows the consumption level at different levels of income.
  4. C=f(Y)

Hence, Option B is correct.

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