Macro

Income & Employment

Medium

Comprehension:

Read the following report carefully and answer the questions on the basis of the same:

Along with the weakening of global economic activity, inflation the world over also remained muted in 2019. Inflation softened in advanced and emerging economies reflecting a slack in consumer demand. From the supply side, lower energy prices in 2019 also contributed to softening of inflation. In India, inflation rose slightly to 4.1% in April - December 2019, after a sharp decline from 5.9% in 2014 to 3.4% in 2018.

The cause of the above situation is?

Increase in government expenditure.

Increase in imports.

Increase in consumption expenditure.

Increase in producer's investment.

✅ Correct Option: 2

Inflation softened due to slack in consumer demand and lower energy prices, indicating weaker demand conditions.

Slack demand implies lower pressure on prices.

An increase in imports increases supply of goods in the economy.

Higher supply leads to lower price levels.

Thus, the situation is best explained by:

Increase in imports

2025: 29 May Shift 2

If the marginal propensity to consume is 0.6. Then what will be the value of tax multiplier?

2025: 13 May Shift 1

Level of employment is determined by which of the following?

2022: 30 Aug Shift 2

What does breakeven point indicate ?

(A) MPS = 0

(B) APC = 1

(D) APS = 0

Choose the correct answer from the options given below :

2026: 12 May Shift 1

An increase in total autonomous expenditure is by 100 units and the value of multiplier is 5. What will be the impact on equilibrium income?

2025: 28 May Shift 2

When $C = 70 + 0.5Y$ and $I = 40$ , what is the equilibrium income?

2022: 30 Aug Shift 2

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

The cause of the above situation is?

Solution

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