state gov Kerala PSC Degree (Common Preliminary Examination) Mock Test Series 2025 General Knowledge Economy National Income Accounting
With reference to the Marginal Propensity to Consume, consider the following statements:
1. The marginal propensity to consume measures the degree to which a consumer will spend or save in relation to an aggregate raise in pay.
2. To calculate the marginal propensity to consume, the change in consumption is divided by the change in inflation.
3. The marginal propensity to consume is a key variable in showing the multiplier effect of economic stimulus spending.
Which of the statements given above is/are correct?
1
1 and 3 only
2
2 only
3
1 and 2 only
4
3 only