The marginal propensity to consume is the ratio of: MCQ with Answer and Explanation

The marginal propensity to consume is the ratio of:
A. consumption to saving
B. change in consumption to change in income
C. change in saving to change in income
D. total consumption to total income
Answer: Option B
Solution (By JKSSB Mock Tests)
MPC is the ratio of change in consumption to change in income.

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Practice More Economy Set 1 Questions

Question #1
In the context of competition policy for digital markets, 'Killer Acquisitions' refer to:
A. Only horizontal mergers among equals
B. Acquisitions that always increase innovation
C. Acquisitions of innovative start-ups by dominant incumbents with the aim of discontinuing the target’s innovation to protect the incumbent’s market position
D. Only conglomerate mergers without any competitive effect

Correct Answer: Option C


Explanation:
Killer acquisitions occur when a dominant firm acquires a potential competitor primarily to eliminate the competitive threat posed by the target’s product or technology rather than to develop it.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Input Tax Credit' under GST is available for:
A. goods and services used for business purposes
B. personal consumption
C. exempt supplies only
D. all goods and services

Correct Answer: Option A


Explanation:
Input tax credit is available for inputs used for business purposes.

This question belongs to: Economy GK Economy Set 1
Question #3
In the context of labour economics, the 'Matching Function' in search theory relates:
A. Only labour demand to the real wage
B. Only wages to productivity
C. The number of job matches to the stocks of unemployed workers and vacancies
D. Only labour supply to the real wage

Correct Answer: Option C


Explanation:
The matching function in search-and-matching models describes how the flow of new hires depends on the number of unemployed workers and the number of job vacancies.

This question belongs to: Economy GK Economy Set 1