Class 12 Macro Economics - Chapter 4: Determination of Income and Employment MCQ Questions

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Your Class 12 Macro Economics Study Path

Question 1

What will be MPC when MPS = 0?

A Infinite

B Two

C Zero

D One

Question 2

If the marginal propensity to consume is greater than the marginal propensity to save, the value of the multiplier will be:

A equal to 5

B two equal to 2

C less than 2

D greater than 2

Question 3

According to classical economists, there always exists an equilibrium in the economy.

A None of these

B Over full employment

C Underemployment

D Full employment

Question 4

What is a fiscal measure of correcting deficient demand?

A All of these

B Deficit financing

C Increase in public expenditure and decrease in taxes

D Decrease in public debt

Question 5

If the income is â‚¹ 400 crores and consumption is â‚¹ 250 crores, what will be the APC?

A 0.58

B 0.60

C 0.63

D 0.67

Question 6

The value of multiplier is

A (frac{1}{MPC-1})

B (frac{1}{1-MPS})

C (frac{1}{MPS})

D (frac{1}{MPC})

Question 7

Aggregate demand can be increased by

A none of the above

B increasing cash reserve ratio

C selling government securities by the Reserve Bank of India

D increasing bank rate

Question 8

If MPC is zero, the value of the multiplier is

A infinity

B between 0 and 1

C 1

Question 9

If MPC is equal to 1, the value of the multiplier is

A Infinity

B Between 0 and 1

C 1

Question 10

Which is the measure of correcting excess demand?

A Increase in public debt

B Increase in public expenditure

C Reduction in taxes

D Deficit financing

Question 11

Average Propensity to Consume can never be ________

A less than one

B more than one

C zero

D positive

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Class 12 Macro Economics - Chapter 4: Determination of Income and Employment MCQ Questions

Your Class 12 Macro Economics Study Path

What will be MPC when MPS = 0?

If the marginal propensity to consume is greater than the marginal propensity to save, the value of the multiplier will be:

According to classical economists, there always exists an equilibrium in the economy.

What is a fiscal measure of correcting deficient demand?

If the income is â‚¹ 400 crores and consumption is â‚¹ 250 crores, what will be the APC?

The value of multiplier is

Aggregate demand can be increased by

If MPC is zero, the value of the multiplier is

If MPC is equal to 1, the value of the multiplier is

Which is the measure of correcting excess demand?

Average Propensity to Consume can never be ________

Practice Complete!

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