Determination of Income and Employment Class 12 MCQ Quiz – Test Your Understanding!

If the increase in National Income is equal to an increase in consumption, identity the value of Marginal Propensity to Save :

The value of __________ can be greater than one.

Read the following statements carefully:

• Statement 1: Aggregate demand is the sum total of consumption and investment expenditures.
• Statement 2: Total consumption consists of an autonomous component and an induced component.

Choose the correct option based on the above statements.

Read the following statement -Assertion (A) and Reason (R). Choose one of the correct alternatives given below:

• Assertion (A): Ex-post Investments represent planned Investments; whereas ex-ante Investments represent the actual level of investments.
• Reason (R): At the equilibrium level, Ex-ante Savings and Ex-ante Investments are always equal.

What is the impact of an increase in reverse repo rate on the lending capacity of commercial banks?

The impacts of "Excess Demand‟ under the Keynesian theory of income and employment, in an economy are: (choose the correct alternative)

What is the term used to describe the level of output where Aggregate Demand is equal to Aggregate Supply?

Graphically, the Aggregate Demand function can be obtained by vertically adding the _________ and _________ functions.

What is the value of the investment multiplier, when the Marginal Propensity to Consume (MPC) is 0.1?

Cut in Repo rate by RBI is likely to……….. (increase/decrease) the demand for goods and services in the economy. (choose the correct alternative)

Choose the equation that represents the equilibrium condition in a two-sector economy.

There are two statements given below, marked as Statement (1) and Statement (2). Read the statements and choose the correct option.

• Statement (1) When aggregate supply is plotted as a 45°line graph, the economy is said to be at equilibrium.
• Statement (2) The total amount spent on aggregate demand is equal to the total expenditure in the country.

Decrease in Cash Reserve Ratio will lead to…...........… (choose the correct alternative)

The difference by which actual Aggregate Demand exceeds the Aggregate Demand, required to establish full employment equilibrium is known as……….………(inflationary gap/deflationary gap). (choose the correct alternative)

Read the following statements carefully:

• Statement 1: The consumption function assumes that consumption changes at a constant rate as income changes.
• Statement 2: Autonomous consumption is the ratio of total consumption (C) to total income (Y).