Q. 21

State which of th

Answer :

(a) According to the Keynesian theory of employment, the state of full employment is obtained only when the economy is in equilibrium - This is a false statement. According to the Keynesian theory of employment, the state of full equilibrium is obtained at more or less than full employment as well.

(b) In a two-sector economy, if consumption is equal to income, the average propensity to save will be zero - This is a true statement. The savings will be zero if income and consumption are equal. So, the average propensity to consumer = Saving/Income = 0/Income = 0


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