Economics · Macroeconomics
Given below are two statements: one is labelled as Assertion (A) and the other is labelled as Reason (R). Assertion (A): The marginal propensity to consume and the value of the investment multiplier are inversely correlated. Reason (R): Saving causes leakage in the income cycle. More savings result in more leakage and a lower investment multiplier value. In the light of the above statements, choose the correct option:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Assertion (A) is False, but Reason (R) is True✓
- 2Assertion (A) is True, but Reason (R) is False
- 3Both Assertion and Reason are true, and Reason (R) is not the correct explanation of Assertion (A)
- 4Both Assertion and Reason are true, and Reason (R) is the correct explanation of Assertion (A)
Correct answer
Assertion (A) is False, but Reason (R) is True
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