(A) elasticity coefficient.
(B) multiplier.
(C) marginal propensity of the autonomous variable.
(D) automatic stabiliser.
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In macroeconomics, equilibrium is defined as that point at which?
(A) planned aggregate expenditure equals aggregate output.
(B) planned aggregate expenditure equals consumption.
(C) aggregate output equals consumption minus investment.
(D) saving equals consumption.
As the MPS increases, the multiplier will?
(A) increase.
(B) either increase or decrease depending on the size of the change in investment.
(C) remain constant.
(D) decrease.
Disposable income is the part of households’ income left after the deduction of?
(A) pension contributions.
(B) income tax and social security payments.
(C) income tax.
(D) savings.
Total consumption divided by total income gives us:
(A) the average propensity to consume.
(B) the marginal propensity to save.
(C) the marginal propensity of expenditure.
(D) the marginal propensity to consume.
In the equation C = a + bY, which describes the aggregate consumption function, ‘a’ stands for?
(A) the amount of consumption when income is zero.
(B) the marginal propensity to consume.
(C) the amount of consumption when income is Maximum.
(D) the average consumption level.
Which of the following is not true?
(A) Starting from no growth, a positive output growth rate would be associated with even higher
rates of investment (the accelerator effect)
(B) Higher investment causes a multiplied increase in income
(C) Such increases in income would continue to induce higher investment, which in turn would continue to cause multiplied increases in output.
(D) All of the above.
When consumption is 650, income is 750; when consumption is 620, income is 700. Assuming there is no government, I=100, net exports are 10, what is the level of equilibrium income?
(A) 500
(B) 625
(C) 775
(D) 850