Assertion (A): The AD = AS approach and the S = I approach give the same equilibrium income.
Reason (R): Since Y = C + S and AD = C + I, the condition AD = Y is the same as S = I.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Subtracting C from both sides of AD = Y gives I = S. R explains A.

Concept: Two approaches agree
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsEquilibrium: saving equals investment

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Assertion (A): The AD = AS approach and the S = I approach give the same equilibrium income.Reason (R): Since Y = C + S and AD = C + I, the condition AD = Y is the same as S = I.

Explanation

Assertion (A): The AD = AS approach and the S = I approach give the same equilibrium income.
Reason (R): Since Y = C + S and AD = C + I, the condition AD = Y is the same as S = I.