Suppose that in a particular economy, the poor earn ₹ 500 per year and spend it all on consumption, the middle class earn ₹ 2,000 per year and spend₹ 1,500 on consumption and the rich earn ₹ 10,000 per year and consume 80% of it. The overall savings rate in the country, if 20% people are poor and 50% are in the middle class is
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Consumption and investment has come up 74 times in 7 exams since 2005.
This question is on The Keynesian consumption function, part of Consumption and investment in Macroeconomics.
Consumption as a function of current income: the propensities to consume and save.
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Question from the JNU SIS 2019 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.