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12th Economics Lesson 4 Online Test | Consumption and Investment Functions ~ Kalvikavi - Educational Website - Question Paper
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12th Economics Online Test
» 12th Economics Lesson 4 Online Test | Consumption and Investment Functions
12th Economics Lesson 4 Online Test | Consumption and Investment Functions
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12th Economics Lesson 4 Online Test | Consumption and Investment Functions
1➤
The average propensity to consume is measured by –
(a) C / Y
(b) C × Y
(c) Y / C
(d) C + Y
2➤
An increase in the marginal propensity to consume will:
(a) Lead to consumption function becoming steeper
(b) Shift the consumption function upwards
(c) Shift the consumption function downwards
(d) Shift savings function upwards
3➤
If the Keynesian consumption function is C = 10 + 0.8 Y then, if disposable income is Rs 1000, what is amount of total consumption?
(a) ₹ 0.8
(b) ₹ 800
(c) ₹ 810
(d) ₹ 0.81
4➤
If the Keynesian consumption function is C = 10 + 0.8 Y then, when disposable income is Rs 100, what is the marginal propensity to consume?
(a) ₹ 0.8
(b) ₹ 800
(c) ₹ 810
(d) ₹ 0.81
5➤
If the Keynesian consumption function is C = 10 + 0.8 Y then, and disposable income is ₹ 100, what is the average propensity to consume?
(a) ₹ 0.8
(b) ₹ 800
(c) ₹ 810
(d) ₹ 0.9
6➤
As national income increases –
(a) The APC falls and gets nearer in value to the MPC.
(b) The APC increases and diverges in value from the MPC.
(c) The APC stays constant
(d) The APC always approaches infinity.
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7➤
As increase in consumption at any given level of income is likely to lead –
(a) Higher aggregate demand
(b) An increase in exports
(c) A fall in taxation revenue
(d) A decrease in import spending
Prepared By : www.kalvikavi.com
8➤
Lower interest rates are likely to:
a) Decrease in consumption
(b) increase cost of borrowing
(c) Encourage saving
(d) increase borrowing and spending
9➤
The MPC is equal to:
(a) Total spending / total consumption
(b) Total consumption / total income
(c) Change in consumption / change in income
(d) None of the above
10➤
The relationship between total spending on consumption and the total income is the –
(a) Consumption function
(b) Savings function
c) Investment function
d) aggregate demand function
11➤
The sum of the MPC and MPS is –
(a) 1
(b) 2
(c) 0.1
(d) 1.1
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12➤
As income increases, consumption will –
(a) fall
(b) not change
(c) fluctuate
(d) increase
13➤
When investment is assumed autonomous the slope of the AD schedule is determined by the –
(a) marginal propensity to invest
(b) disposable income
(c) marginal propensity to consume
d) average propensity to consume
14➤
The multiplier tells us how much changes after a shift in –
a) Consumption, income
(b) investment, output
(c) savings, investment
d) output, aggregate demand
15➤
The multiplier is calculated as –
(a) 1 / (1 – MPC)
(b) 1 / MPS
(c) 1 / MPC
(d) a and b
16➤
It the MPC is 0.5, the multiplier is –
(a) 2
(b) 1/2
(c) 0.2
(d) 20
17➤
In an open economy import ………………………. the value of the multiplier
(a) Reduces
(b) increase
(c) does not change
(d) changes
18➤
According to Keynes, investment is a function of the MEC and –
(a) Demand
(b) Supply
(c) Income
(d) Rate of interest
19➤
The term super multiplier was first used by –
(a) J.R.Hicks
(b) R.G.D. Allen
(c) Kahn
(d) Keynes
20➤
The term MEC was introduced by –
(a) Adam Smith
(b) J.M. Keynes
(c) Ricardo
(d) Malthus
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