(i) When there are diminishing returns to a factor. Marginal Product and Total Product born diminishes. |
(ii) When Marginal Revenue (MR) is positive and constant, Average Revenue (AR) and Tom Revenue (TR) both will increase at constant rate. |
(iii) As output is increased, the difference between Average Total Cost (ATC) and Average Variable Cost (AVC) falls and ultimately becomes zero. |
(i) As output increases. Average Cost (AC) tends to be closer to Average Variable Cost (AVC |
(ii) Average Cost (AC) is more consistent than Marginal Cost (MC). |
(iii) When Marginal Revenue (MR) is zero, Average Revenue becomes maximum. |
(i) Average propensity to save |
(ii) Marginal propensity to save |
Consumption Expenditure(Rs.) | Saving (Rs.) | Income (Rs.) | Marginal Propensity to Consume |
100 | 50 | 150 | \[-\] |
175 | 75 | \[-\] | \[-\] |
250 | 100 | \[-\] | \[-\] |
325 | 125 | \[-\] | \[-\] |
(i) Bank of issue |
(ii) Custodian of Foreign Exchange Reserves |
(i) Profit of public sector undertakings. |
(ii) Market borrowing by the government. |
(iii) Income from sale of its share in public sector undertakings. |
(iv) Income from sale of spectrum. |
Explain the steps taken in derivation of consumption curve from saving curve. Use diagram. |
Or |
Explain the steps taken in the derivation of saving curve from the consumption curve. Use diagram. |
(i) Income Method and |
(ii) Expenditure Method, |
S. No. | Items | (Rs.) in crores |
(i) | Private Final Consumption Expenditure | 1,000 |
(ii) | Net Domestic Capital Formation | 200 |
(iii) | Profits | 400 |
(iv) | Compensation of Employees | 800 |
(v) | Rent | 250 |
(vi) | Government Final Consumption Expenditure | 500 |
(vii) | Consumption of Fixed Capital | 60 |
(viii) | Interest | 150 |
(ix) | Net Current Transfers from Rest of the World | \[(-)\]80 |
(x) | Net Factor Income from Abroad | \[(-)\]10 |
(xi) | Net Exports | \[(-)\]20 |
(xii) | Net Indirect Taxes | \[(-)\]80 |
(i) between autonomous and accommodating transactions of Balance of Payments account and |
(ii) between current account and capital account. |
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