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

In an economy, the break-even point and equilibrium point may lie at the same level of income, if ex-ante investments are _____.

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?

Given below are some basic activities that occur in an economy. Identify the activity that would not help to study the economy in its totality.

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.

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

• Assertion (A): The saving curve makes a negative intercept on the vertical axis at a zero level of income.
• Reason (R): The saving function refers to the functional relationship between saving and income.

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

Suppose for a given economy,
S= -60 + 0.1Y
I= ₹ 4,000 crore
(Where S = Saving Function, Y = National Income and I = Investment Expenditure)
The equilibrium level of Income would be ₹ ______ crore.
(Choose the correct alternative to fill up the blank)

If in an economy, the value of the investment multiplier is 4 and Autonomous Consumption is ₹ 30 Crore, the relevant consumption function would be:

What happens when ex-ante Aggregate Demand is more than ex-ante Aggregate Supply?

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

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

As the Marginal Propensity to Save (MPS) increases, the value of the investment multiplier ____________. (Choose the correct alternative)

What is the effect of an increase in government expenditure on Aggregate Demand?

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.