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This set of Macro Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on Macro Economics 1 Set 4
Q1 | Value of MPC is
- >1
- <1
- 0≤ mpc ≥1
Q2 | Schedule that expressesrelationship between rate of interest and corresponding amountof investment
- mei
- mec
- effective demand
- aggregate demand
Q3 | Net investment is
- value of gross minus subsidies
- investment after providing for depreciation
- value of gross output before providing forsubsidies
- none of the above
Q4 | MEC is directly related to
- prospective yield
- supply price
- rate of interest
- all of the above
Q5 | According to Keynes the most important determinant ofconsumption
- rate of interest
- saving
- income
- investment
Q6 | In the Keynesian two sector economy, AD
- s=i
- s>i
- s
- s=0
Q7 | In the equation C = 60 + 0.6 Y, MPCis
- 60
- 0.6
- 1
Q8 | Keynes assumed thepresence of --------- economy for the fundamental law ofconsumption
- capitalistic
- socialistic
- planned
- none of the above
Q9 | According to Keynes the most important determinant ofinvestment
- mec
- effective demand
- aggregate demand
- rate of interest
Q10 | When disposable income risesfrom Rs 500 to Rs 600 and consumption expenditurechanges from Rs 470 to Rs 560, MPC will be equalto
- 900
- 100
- 0.9
- 1
Q11 | In a two sector economy, aggregate demand is equalto
- c+i
- c+s
- s+i
- all of the above
Q12 | In Keynesian terminology, investment means:
- financial investment
- real investment
- induced investment
- none of the above
Q13 | Rate of change in savings to change in income:
- aps
- apc
- mps
- mpc
Q14 | Keynesian economics is also known as:
- supply side economics
- monetary economics
- rational expectations
- depression economics
Q15 | Which of the following can cause shifts in consumption function:
- psychological attitude
- social practices
- business motives
- changes in price level
Q16 | APC is determined by the following equation:
- c/y
- s/y
- ∆c/∆y
- ∆s/∆y
Q17 | In the Keynesian two sector model, when AD = AS, then:
- s
- s>i
- s=i
- i=0
Q18 | Which of the following is not correct:
- mpc declines as income increases
- mpc is positive but less than one
- mps is always positive
- all the above
Q19 | According to Keynes, saving is:
- private virtue but not social virtue
- private and social virtue
- is neither private virtue nor social virtue
- is either social virtue or private virtue
Q20 | MEC isinversely related to:
- prospective yield
- supply price
- investment
- rate of interest
Q21 | Keynes considered subjective and objective factors:
- important determinants of consumption
- unimportant determinants of consumption
- determinants of investment
- determinants of business’s willingness to pay
Q22 | The sum of marginal propensity to consume plus marginal propensity to save mustequal to:
- 0
- 1
- 100
- 1000
Q23 | Keynesian economics is:
- macro
- micro
- both
- none
Q24 | The MEC increases when:
- capitalstock increases
- capitalstock decreases
- capital remains constant
- none of the above
Q25 | Which of the following is correct?
- 1+mps =mpc
- 1- mpc =mps
- mpc + mps >1
- mpc+ mps<1