12th Grade > Economics - 2
INCOME DETERMINATION MCQs
Total Questions : 30
| Page 1 of 3 pages
Answer: Option D. -> Both A and B
:
D
If aggregate demand increases, aggregate supply will increase only when there are an excess capacity and under-utilisation of the existing resources.
:
D
If aggregate demand increases, aggregate supply will increase only when there are an excess capacity and under-utilisation of the existing resources.
Answer: Option A. -> True
:
A
True. Marginal propensity to save is the ratio between additional saving and additional income which is always positive because of positive relationship between saving and income.
:
A
True. Marginal propensity to save is the ratio between additional saving and additional income which is always positive because of positive relationship between saving and income.
Answer: Option A. -> True
:
A
True, there is a direct relationship between MPC and value of investment multiplier. Higher the value of MPC, higher the investment multiplier and vice cersa. Because,
M=11−MPC
:
A
True, there is a direct relationship between MPC and value of investment multiplier. Higher the value of MPC, higher the investment multiplier and vice cersa. Because,
M=11−MPC
Answer: Option A. -> Increase
:
A
If the marginal propensity to save decreases, the value of the multiplier will increase.
:
A
If the marginal propensity to save decreases, the value of the multiplier will increase.
Answer: Option B. -> 0.2
:
B
Multiplier (M) = ΔYΔA
= (4000−3000)(600−400)
= 5
MPS = 1M
=15
= 0.2
:
B
Multiplier (M) = ΔYΔA
= (4000−3000)(600−400)
= 5
MPS = 1M
=15
= 0.2
Answer: Option B. -> 10,000
:
B
ΔY=11−MPC.ΔA [Where A is autonomous expenditure by the government]
=11−0.5×5,000=5,0000.5=10,000.
:
B
ΔY=11−MPC.ΔA [Where A is autonomous expenditure by the government]
=11−0.5×5,000=5,0000.5=10,000.
Answer: Option B. -> False
:
B
False. Saving can be negative when consumption is greater than income. Negative saving amounts to borrowing.
:
B
False. Saving can be negative when consumption is greater than income. Negative saving amounts to borrowing.
Answer: Option C. -> 0
:
C
M(multiplier) =11−MPC
Given that, 11−MPC=1⇒1=1−MPC
⇒ MPC = 1 - 1 = 0
Thus, when M = 1, MPC = 0.
:
C
M(multiplier) =11−MPC
Given that, 11−MPC=1⇒1=1−MPC
⇒ MPC = 1 - 1 = 0
Thus, when M = 1, MPC = 0.
Answer: Option B. -> 0.8
:
B
Multiplier (M) = ΔYΔA
= (4000−3000)200
= 5
MPS = 1M = 0.2
Therefore, MPC = 1 - MPS = 0.8
:
B
Multiplier (M) = ΔYΔA
= (4000−3000)200
= 5
MPS = 1M = 0.2
Therefore, MPC = 1 - MPS = 0.8
Answer: Option B. -> False
:
B
False. Saving can be negative when consumption is greater than income. Negative saving amounts to borrowing.
:
B
False. Saving can be negative when consumption is greater than income. Negative saving amounts to borrowing.
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