Read the following statements carefully: ...

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CBSE 2023 Class 12 Economics Outside Delhi Set 1

Question : 3 of 52

Marks: +1, -0

Read the following statements carefully:

Statement 1: The induced consumption shows, the direct relation between consumption and income.

Statement 2 : With a certain increase in income, induced consumption also increases.

In the light of the given statements, choose the correct alternative from the following:

Statement 1 is true and Statement 2 is false.
Statement 1 is false and Statement 2 is true.
Both Statements 1 and 2 are true.
Both Statements 1 and 2 are false.

Solution:

Both Statements 1 and 2 are true.

Explanation: Induced consumption is that level of consumption which is dependent on level of income. It is directly related to income. As income increase, induced consumption also increases.

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