Macro

Income & Employment

Easy

From the equations given below, choose the equation which correctly represents the consumption function.

$C = \bar{c} + (1-b)Y$

$C = -\bar{c} + (1-b)Y$

$C = \bar{c} + bY$

$C = -\bar{c} + bY$

✅ Correct Option: 3

The standard consumption function is $C = \bar{c} + bY$ , where $\bar{c}$ is autonomous consumption (positive), b is MPC, and Y is income. Hence option 3 is correct.

2025: 28 May Shift 1

Arrange the following steps of determination of equilibrium income in chronological order if

C = 40 + 0.8Y, I = 10.

(A) Y = C + I

(B) 0.2Y = 50

(D) Y = 250

Choose the correct answer from the options given below:

(A), (B), (C), (D)
(A), (C), (B), (D)
(B), (A), (D), (C)
(C), (B), (D), (A)

2025: 2 June Shift 1

Match List-I with List-II

List-I	List-II
(A) Marginal Propensity to Consume	(I) C/Y
(B) Marginal Propensity to Save	(II) ΔC/ ΔY
(C) Average Propensity to Save	(III) S/Y
(D) Average Propensity to Consume	(IV) ΔS/ ΔY

Choose the correct answer from the options given below:

2022: 15 July Shift 2

A producer plans to add Rs.200 worth of goods to her stock by the end of the year. However due to an unexpected fall in the demand for her goods she adds Rs.250 worth of goods. Her ex-ante investment was____ and ex post investment was____

2026: 11 May Shift 1

What is the value of the vertical intercept and slope of the given equation for the consumption function?

$C = A + \frac{1}{2}Y$

2022: 10 Aug Shift 2

When consumption function starts from y axis, it indicates that ?

2023: 28 May Shift 2

The aggregate demand line shifts parallel upwards. The reason behind this is :

From the equations given below, choose the equation which correctly represents the consumption function.

Solution

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