CHAPTER- DETERMINATION OF INCOME AND EMPLOYMENT
MULTIPLE CHOICE QUESTIONS
1.______ is called planned investment.
a) Ex-ante investment
b) Ex-post investment
c) Both (a) and (b)
d) None of the above
2. _______ is the change in the consumption per unit change in income.
a) Marginal propensity to save
b) Marginal propensity to save
c) Marginal propensity to consume
d) Average propensity to save
3. _______ is the consumption per unit of income
a) Marginal propensity to save
b) Average propensity to save
c) Average propensity to consume
d) Marginal propensity to consume
4. ______ is the saving per unit of income.
a) Average propensity to consume
b) Average propensity to save
c) Marginal propensity to consume
d) Marginal propensity to save
5. _______ is defined as addition to the stock of physical capital.
a) Investment
b) Consumptions
c) Savings
d) All of the above
6. In a given situation when AD > AS in an economy then _______.
a) General Price level in the economy will decrease
b) Inventory stock will increase beyond desired level
c) Situation of excess demand arises
d) Producers will increase planned output
7. What will be the value of APS when APC is 0?
a) 0 b) 1 c) 2 d) ∞
8. Which of the following statements about APC is incorrect?
a) APC can be greater and smaller than 1
b) APC can be equal to 1
c) APC can be zero
d) APC falls with increase in income
9. APC is equal to-
a) Y/C b) ∆C/∆Y c) C/Y d) ∆Y/∆C
10. Choose the correctly matched pair from the following-
Column A Column B
A. Demand curve 1. Positively sloped
B. Supply curve 2. Planned I = Planned S
C. Saving- income approach 3. 45° positively sloped
D. Equilibrium level of Income 4. Alternative approach of AD – AS
a)A-4 b)B-1 c)C-3 d)D-2
-CREATED BY ROHENDRA PRATAP SINGH
ANSWERS
1. ______ is called planned investment.
Answer: a) Ex-ante investment
2. _______ is the change in the consumption per unit change in income.
Answer: c) Marginal propensity to consume
3. _______ is the consumption per unit of income.
Answer: b) Average propensity to consume
4. ______ is the saving per unit of income.
Answer: b) Average propensity to save
5. _______ is defined as addition to the stock of physical capital.
Answer: a) Investment
6. In a given situation when AD > AS in an economy then _______.
Answer: c) Situation of excess demand arises
7. What will be the value of APS when APC is 0?
Answer: d) ∞
8. Which of the following statements about APC is incorrect?
-Answer: c) APC can be zero
9. APC is equal to-
Answer: c) C/Y
10. Choose the correctly matched pair from the following -
Answer: c) C-3
