Keerthana
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Which of the following statements is/are correct in context with the passage?

a

Economists fail to distinguish between consuming and producing value and form a mistaken belief.

b

Economic growth and declines have always been led by changes in business and durable goods investment.

c

Income distribution is evenly distributed among the rich and is compatible with the tendency to consume.

d

Only (a)

e

Both (a) and (b)

Answer : Option E
Explanation :

Both statements 1 and 2 are correct. Refer the

following lines

Option 1 :The systematic failure by Keynesian

economists and pundits to distinguish between

consuming and producing value is the single most

damaging fallacy in popular economic thinking.

Option 2 : Economic growth (booms) and

declines (bust) have always been led by changes

in business and durable goods investment, while

final consumer goods spending has been

relatively stable through the business cycle.

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