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

Are you ready to test your knowledge of Determination of Income and Employment from the Class 12 Economics syllabus? This chapter focuses on aggregate demand, aggregate supply, equilibrium level of income, and Keynesian economics, which are crucial for CBSE board exams and competitive exams.

About the Quiz

Chapter Name: Determination of Income and Employment
Subject: Economics
Book: NCERT Class 12 Economics
Question Type: Multiple Choice Questions (MCQs)
Leaderboard: Yes (Check Your Rank!)

Why Take This Quiz?

✔ Helps in CBSE board exam revision
✔ Strengthens understanding of national income equilibrium & employment theories
✔ Enhances knowledge of aggregate demand & supply concepts
✔ Track your progress with the leaderboard

Click Below to Start the Quiz!

Chapter 3 Determination of Income and Employment

1 / 15

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

0.5

-1

2 / 15

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

0.01

100

1.1

3 / 15

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

increase

decrease

4 / 15

The value of __________ can be greater than one.

Marginal Propensity to Consume

Marginal Propensity to Save

Average Propensity to Consume

Average Propensity to Save

5 / 15

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.

government introducing policies

aggregate demand and supply of goods

determination of equilibrium level of income and employment

determination of the consumer’s equilibrium

6 / 15

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)

40,600

60,400

40,000

4,000

7 / 15

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

fall in the general price level

fall in aggregate demand

rise in aggregate demand

no change in aggregate demand

8 / 15

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

Effective demand

Aggregate supply

Equilibrium level of income

Aggregate demand

9 / 15

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

increases

decreases

becomes zero

does not change

10 / 15

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.

Both statements 1 and 2 are true

Statement 1 is true and statement 2 is false

Statement 1 is false and statement 2 is true

Both statements 1 and 2 are false

11 / 15

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

Equal to unity

Greater than one

Less than one

Equal to zero

12 / 15

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

aggregate supply, consumption

consumption, saving

investment, saving

consumption, investment

13 / 15

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

Aggregate Demand remains constant

Decrease in Aggregate Demand

Increase in Aggregate Demand

No impact on Aggregate Demand

14 / 15

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

C=(-)30+0.25Y

C=30-0.25Y

C=30+0.75 Y

C=30-0.75Y

15 / 15

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

Level of output, income, and employment decrease

Level of output, income, and employment increase

There is no impact on the level of output, income, and employment

Level of output, income, and employment remain constant

Your score is

The average score is 51%

Leaderboard – Top Scorers

Check the top scorers here!

Pos.	Name	Score	Duration	Points
1	pranjal	67 %	4 minutes 12 seconds	10
2	Fahad Hasan	60 %	11 minutes 37 seconds	9
3	Jyotiraditya	27 %	2 minutes 9 seconds	4

Key Topics Covered in the Quiz

✔ Aggregate Demand (AD) and Aggregate Supply (AS)
✔ Consumption, Investment & Savings
✔ Equilibrium Level of Income & Employment
✔ Multiplier Effect & Its Applications
✔ Concept of Full Employment & Underemployment
✔ Keynesian Theory of Income & Employment

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About the Quiz

Why Take This Quiz?

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Key Topics Covered in the Quiz

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