Assertion (A): Across rising levels of national income, consumption is high when saving is high. Reason…

In Keynesian macroeconomics, both consumption C(Y) and saving S(Y) are increasing functions of national income Y (since both the marginal propensity to consume and the marginal propensity to save lie between 0 and 1), so across rising income levels consumption and saving are high together (Assertion A is true). Similarly, via the investment multiplier, equilibrium national income is high when investment is high (Reason R is true). However, the direct explanation of Assertion (A) is that both consumption and saving are positive functions of income, whereas Reason (R) states the determinant of equilibrium income. Therefore, both (A) and (R) are true, and (R) is not the correct explanation of (A) .