EconomicsCBSE Class 12 · Sample paper, session 2023-24 · 1 mark · MCQ

CBSE Class 12 Economics sample paper 2023-24: question 1

From the official CBSE sample question paper for 2023-24, section A, question 1, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q1 · 1 mark · MCQDetermination of Income and Employment

Read the following statements carefully:
Statement 1: Consumption function assumes that, consumption changes at a constant rate as income changes.
Statement 2: Autonomous consumption is the ratio of total consumption (C) to total income (Y).
In light of the given statements, choose the correct alternative from the following:

(A)Statement 1 is true and Statement 2 is false.
(B)Statement 1 is false and Statement 2 is true.
(C)Both Statements 1 and 2 are true.
(D)Both Statements 1 and 2 are false.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2023-24.

Hints

Open one hint at a time and try again before the next.

Hint 1

Recall the form $C = \overset{ˉ}{C} + bY$ . What stays constant in it?

Hint 2

Which concept is defined as $C / Y$ : APC or autonomous consumption?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

Verified: two independent solves agree and the official marking scheme matchesChecked 2026-11-01

Statement 1 is true: the Keynesian consumption function $C = \overset{ˉ}{C} + bY$ assumes a constant MPC, so consumption changes at a constant rate as income changes.
½ mark
Statement 2 is false: $C / Y$ is the Average Propensity to Consume. Autonomous consumption ( $\overset{ˉ}{C}$ ) is the consumption made even when income is zero. Hence option (A).
½ mark

Answer: (A) Statement 1 is true and Statement 2 is false

Where the marks are

Chooses option (A) (1 mark)

Revise the chapter

Chapter: Determination of Income and Employment (notes, formulas, where marks are lost and every past question)

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