This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Economics Macro Economics > Class 12 Economics (Macro Economics) Chapter 4 Determination Of Income And Employment – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 4 Determination Of Income And Employment Quiz 1 (48 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Margin requirement during excess demand situation is A) Decreased. B) Not changed. C) Increased. D) None of these. Show Answer Correct Answer: C) Increased. 2. There is a ..... relationship between MPS and investment multiplier. A) Positive. B) Inverse. C) Direct. D) None of the above. Show Answer Correct Answer: B) Inverse. 3. If C= 50+0.5Y, I= 7000, Find equilibrium level of income and consumption expenditure A) 10000 and 7000. B) 14100 and 7100. C) 14000 and 7000. D) 14100 and 7000. Show Answer Correct Answer: B) 14100 and 7100. 4. What is the other name name of fiscal policy A) Quantitative. B) Qualitative. C) Fiscal. D) None of the above. Show Answer Correct Answer: C) Fiscal. 5. Consumption function is a functional relationship between A) Income and Saving. B) Price and consumption. C) Consumption and income. D) Consumption and savings. Show Answer Correct Answer: C) Consumption and income. 6. What is the formula of APS? A) $\Delta$. B) S/Y. C) Y/S. D) None of the above. Show Answer Correct Answer: B) S/Y. 7. If investment falls to zero, national income does not fall to zero because of: A) Autonomous consumption. B) Induced investment. C) Autonomous investment. D) None of the above. Show Answer Correct Answer: A) Autonomous consumption. 8. Value of investment multiplier can be calculated by A) 1/1-MPS. B) 1/MPC. C) 1/MPS. D) 1/MPC-1. Show Answer Correct Answer: C) 1/MPS. 9. Which kind of unemployment exist at full employment? A) Disguised. B) Voluntary. C) Involuntary. D) All of the above. Show Answer Correct Answer: B) Voluntary. 10. Which of the following is not true about AD in a two-sector economy? A) AD=consumption+saving. B) AD curve starts from some point above the origin. C) AD=consumption+investment. D) AD curve has a positive slope. Show Answer Correct Answer: A) AD=consumption+saving. 11. Aggregate supply = Consumption A) Supply. B) Investment. C) Saving. D) None of the above. Show Answer Correct Answer: C) Saving. 12. What can be the maximum value of MPS? A) 0. B) 1. C) 2. D) None of the above. Show Answer Correct Answer: B) 1. 13. Which one is correct about Break even point? A) MPS is 1. B) MPC is 0. C) APC is 1. D) APS is 1. Show Answer Correct Answer: C) APC is 1. 14. Two components of AS(Aggregate supply) are A) C+G. B) C+S. C) All the above. D) None of the above. Show Answer Correct Answer: B) C+S. 15. Break even point is situation when A) Y=S. B) S=0. C) Y=C. D) Both b and c. Show Answer Correct Answer: D) Both b and c. 16. When AD = AS then it shows A) Full employment. B) Full employment equilibrium. C) Both (a) and (b). D) Break even point. Show Answer Correct Answer: B) Full employment equilibrium. 17. If MPC=0.9, then the value of multiplier will be A) 6. B) 9. C) 12. D) 10. Show Answer Correct Answer: D) 10. 18. Equilibrium level of income is always ..... than Break even level of income. A) Higher. B) Lower. C) All the above. D) None of the above. Show Answer Correct Answer: A) Higher. 19. When C=100+0.5Y and Y=1200, autonomous consumption would be A) 1000. B) 500. C) 100. D) 600. Show Answer Correct Answer: C) 100. 20. MPC CAN BE GREATER THAN ONE A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: B) FALSE. 21. The slope of AD and Consumption curve is A) MPS. B) PC. C) MPC. D) APS. Show Answer Correct Answer: C) MPC. 22. If MPC=0, the value of multiplier is A) 0. B) 1. C) Between 0 and 1. D) Infinity. Show Answer Correct Answer: B) 1. 23. Autonomous consumption is equal to A) Saving. B) Dissaving. C) All the above. D) None of the above. Show Answer Correct Answer: B) Dissaving. 24. What is the value of MPC when MPS is zero? A) 1. B) 0. C) 0.5. D) None of the above. Show Answer Correct Answer: A) 1. 25. Saving curve intercept on x-axis when A) Y = C. B) S = 0. C) BOTH (a) and (b). D) None of these. Show Answer Correct Answer: C) BOTH (a) and (b). 26. If S=-100+0.25Y and I= 2000, Find equilibrium level of income and consumption expenditure at that level A) 4400 and 2000. B) 8400 and 2100. C) 8000 and 2000. D) 8400 and 6400. Show Answer Correct Answer: D) 8400 and 6400. 27. Relation between Multiplier and MPC= A) Direct. B) Inverse. C) All the above. D) None of the above. Show Answer Correct Answer: A) Direct. 28. Inflationary gap A) Excess Demand. B) Implicit Demand. C) Revenue policy. D) None of the above. Show Answer Correct Answer: A) Excess Demand. 29. If MPC increases value of multiplier A) Increase. B) Decrease. C) Remains constant. D) None of these. Show Answer Correct Answer: A) Increase. 30. In case of excess demand, the RBI ..... the bank rate or interest rate which makes the credit drear A) Increases. B) Decreases. C) Deposit. D) None of the above. Show Answer Correct Answer: A) Increases. 31. Excess demand is also known as A) Deflationary Gap. B) Inflationary Gap. C) Deficient demand. D) None of the Above. Show Answer Correct Answer: B) Inflationary Gap. 32. To reduce infaltionary gap Bank rate should be A) Increased. B) Decreased. C) All the above. D) None of the above. Show Answer Correct Answer: A) Increased. 33. Consumption function is the functional relationship between ..... and ..... A) Consumption, aggregate demand. B) Consumption, national income. C) Aggregate demand, aggregate supply. D) None of the above. Show Answer Correct Answer: B) Consumption, national income. 34. AD is expressed in terms of A) Money. B) Units bought. C) Both. D) None of the above. Show Answer Correct Answer: A) Money. 35. At equilibrium income level Savings will be equal to A) Investment. B) AS. C) Income. D) Consumption. Show Answer Correct Answer: A) Investment. 36. Autonomous consumption and autonomous investment together is known as A) National income. B) Autonomous expenditure. C) Total Expenditure. D) Both b and C. Show Answer Correct Answer: B) Autonomous expenditure. 37. To correct the excess demand situation using open market operation, RBI A) Sells securities in open market. B) Purchases securities in open market. C) Keeps securities in same position. D) None of the above. Show Answer Correct Answer: A) Sells securities in open market. 38. Under inflationary gap situation the reserve ratios of the commercial banks are A) Increased. B) Decreased. C) Not affected. D) None of the above. Show Answer Correct Answer: A) Increased. 39. If C=500+0.5b and income is 200, autonomous consumption is A) 500. B) 600. C) 200. D) 0.5. Show Answer Correct Answer: A) 500. 40. Investment which is not affected by level of income is A) Induced investment. B) Autonomous investment. C) Both. D) None of above. Show Answer Correct Answer: B) Autonomous investment. 41. Aggregate supply and ..... are always equal. A) National income. B) Aggregate demand. C) Marginal propensity to save. D) Average propensity to consume. Show Answer Correct Answer: A) National income. 42. If MPC=MPS, the value of multiplier will be A) 0. B) Infinity. C) 2. D) 1. Show Answer Correct Answer: C) 2. 43. Components of Aggregate demand are A) Consumption(C) & Investment(I). B) Consumtion(C) & saving(S). C) All the above. D) None of the above. Show Answer Correct Answer: A) Consumption(C) & Investment(I). 44. When AD>AS it is situation of A) Excess Demand. B) Deficient Demand. C) Equilibrium situation. D) None of above. Show Answer Correct Answer: A) Excess Demand. 45. Deflationary gap A) Excess Demand. B) Deficient Demand. C) Revenue policy. D) None of the above. Show Answer Correct Answer: B) Deficient Demand. 46. If income increases from 2500 to 3900 and autonomous investment increases by 350, the MPC Should be A) 0.9. B) 0.75. C) 0.6. D) 0.8. Show Answer Correct Answer: B) 0.75. 47. National income is determined where A) AD=AS. B) AD+AS. C) All the above. D) None of the above. Show Answer Correct Answer: A) AD=AS. 48. With increase in Income of economy the value of autonomous investment A) Increases. B) Remains same. C) Becomes zero. D) Decreases. Show Answer Correct Answer: B) Remains same. 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