Assertion (A): Savings are Zero in case of two-sector economy

Question

635 viewsNovember 18, 2023Assertion Reason

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Anurag Pathak24.20K November 18, 2023 0 Comments

Assertion (A): Savings are Zero in case of two-sector economy.

Reason (R): Households spend the entire factor income received from firms on consumption of goods and services.

Choose the correct alternative among those given below

(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).

(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).

(c) Assertion (A) is True but Reason (R) is False.

(d) Assertion (A) is False but Rason (R) is True.

score 0 · Answer 1 · 2023-11-18T07:40:14+00:00

Solution:-

Ans – (a)

correct Savings are assumed to be zero in two sector economy and households spend the entire factor income on consumption of goods and services.

Thus, Assertion and Reason both are true and Reason (R) is the correct explanation of Assertion (A).