Q1:
3 June Shift 2
Macro > Income & Employment
Medium
When autonomous investment increases, the aggregate demand curve shifts?
Correct Answer
Option 2
Correct Answer
CUET Economics Macro > Income & Employment PYQs
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Q2:
3 June Shift 2
Macro > Income & Employment
Medium
The study of macroeconomics usually simplifies the analysis of how the country's total ouput and the level of employment are related to.
Correct Answer
Option 2
Correct Answer
Q3:
3 June Shift 2
Macro > Income & Employment
Easy
The function of the investment multiplier is?
Correct Answer
Option 4
Correct Answer
Q4:
3 June Shift 2
Macro > Income & Employment
Hard
The aggregate demand function shows the total demand for goods and services at each level of income. The graphical representation of the aggregate demand function will have which of the following features?
The aggregate demand function shows the total demand for goods and services at each level of income. The graphical representation of the aggregate demand function will have which of the following features? (A) It can be obtained by vertically adding the consumption and investment function. (B) It is parallel to the consumption function i.e., they have the same slope c. (C) It shows ex post demand. (D) It shows ex ante demand. Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q5:
3 June Shift 2
Macro > Income & Employment
Medium
Match List-I with List-II | List-I | List-II | | --- | --- | | (A) Inventory | (I) Planned | | (B) Consumption | (II) Actually happened | | (C) Ex-ante | (III) Investment | | (D) Ex-post | (IV) Household Income | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q6:
3 June Shift 2
Macro > Income & Employment
Easy
$C = 120 + 0.5Y$ $I = 20$ What is the equilibrium income?
Correct Answer
Option 2
Correct Answer
Q7:
3 June Shift 2
Macro > Income & Employment
Medium
In macroeconomics, when a price is constant, equilibrium is achieved at a point where?
Correct Answer
Option 3
Correct Answer
Q8:
3 June Shift 2
Macro > Income & Employment
Easy
Even if income is zero, some consumption still takes place, which is independent of income. This type of consumption is called?
Correct Answer
Option 1
Correct Answer
Q9:
3 June Shift 2
Macro > Income & Employment
Medium
When the marginal propensity to consume is given as $0.5$. What is the tax multiplier?
Correct Answer
Option 4
Correct Answer
Q10:
3 June Shift 2
Macro > Income & Employment
Hard
Investment can mean the amount a producer plans to add to his inventory, which may be different from what she ends up doing. Arrange the given case study considering this process of ex-ante to ex-post investment.
Arrange the given case study considering this process of ex-ante to ex-post investment. (A) At the end of the year, his inventory goes up by Rs 70 only (B) Due to an unforeseen upsurge in demand for his goods in the market, the volume of sales exceeds (C) The producer plans to add Rs 100 worth of goods to his stock by the end of the year, which is his planned investment (D) To meet this extra demand, he has to sell goods worth Rs 30 from his stock Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q11:
3 June Shift 1
Macro > Income & Employment
Medium
Suppose, following data is presented, for an imaginary economy: Autonomous Consumption = ₹ 100 crore Marginal Propensity to Consume = 0.6 Investment = 200 crore. Identify which of the following is the correct value of national income?
Correct Answer
Option 1
Correct Answer
Q12:
3 June Shift 1
Macro > Income & Employment
Easy
Graphically, Aggregate Demand (AD) function can be obtained by vertically adding the ________ and ________.
Correct Answer
Option 1
Correct Answer
Q13:
3 June Shift 1
Macro > Income & Employment
Easy
The range of value of investment multiplier is always between _________ and _________.
Correct Answer
Option 2
Correct Answer
Q14:
3 June Shift 1
Macro > Income & Employment
Easy
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.
Due to weakening of global economic activity, level of aggregate demand ___________ in the economy.
Correct Answer
Option 2
Correct Answer
Q15:
3 June Shift 1
Macro > Income & Employment
Medium
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 impact of the above situation under the Keynesian theory of income and employment in an economy is?
Correct Answer
Option 1
Correct Answer
Q16:
3 June Shift 1
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?
Correct Answer
Option 2
Correct Answer
Q17:
3 June Shift 1
Macro > Income & Employment
Medium
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.
In case of an underemployment equilibrium, which of the following alternative is not true?
Correct Answer
Option 4
Correct Answer
Q18:
3 June Shift 1
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.
Which of the following does not lead to fall in Aggregate Demand?
Correct Answer
Option 3
Correct Answer
Q19:
2 June Shift 1
Macro > Income & Employment
Medium
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:
Correct Answer
Option 3
Correct Answer
Q20:
2 June Shift 1
Macro > Income & Employment
Easy
__________ refers to that level of aggregate demand, which can be met by the corresponding supply in the economy.
Correct Answer
Option 2
Correct Answer
Q21:
2 June Shift 1
Macro > Income & Employment
Hard
In an economy if all individual increases the proportion of income they save, then arrange following statements in their chronological order. (A) Marginal propensity to consume decreases. (B) The level of income decreases. (C) The amount of savings remains the same. (D) The aggregate demand curve rotates downwards. Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q22:
2 June Shift 1
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Calculate various parameters of Aggregate Demand, Aggregate Supply and related concepts
| Income (in ₹ Crore) | Consumption (in ₹ Crore) |
| ------------------- | ------------------------ |
| 0 | 50 |
| 50 | 75 |
| 100 | 100 |
| 200 | 150 |
| 300 | 200 |
| 400 | 250 |
When income is more than consumption, then value of Average Propensity to Save (APS) is.
Correct Answer
Option 1
Correct Answer
Q23:
2 June Shift 1
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Calculate various parameters of Aggregate Demand, Aggregate Supply and related concepts
| Income (in ₹ Crore) | Consumption (in ₹ Crore) |
| ------------------- | ------------------------ |
| 0 | 50 |
| 50 | 75 |
| 100 | 100 |
| 200 | 150 |
| 300 | 200 |
| 400 | 250 |
When income is less than consumption, value of Average Propensity to Consume (APC) is.
Correct Answer
Option 1
Correct Answer
Q24:
2 June Shift 1
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Calculate various parameters of Aggregate Demand, Aggregate Supply and related concepts
| Income (in ₹ Crore) | Consumption (in ₹ Crore) |
| ------------------- | ------------------------ |
| 0 | 50 |
| 50 | 75 |
| 100 | 100 |
| 200 | 150 |
| 300 | 200 |
| 400 | 250 |
From the given table, identify the level of income, where Average Propensity to Save (APS) becomes zero:
Correct Answer
Option 2
Correct Answer
Q25:
2 June Shift 1
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Calculate various parameters of Aggregate Demand, Aggregate Supply and related concepts
| Income (in ₹ Crore) | Consumption (in ₹ Crore) |
| ------------------- | ------------------------ |
| 0 | 50 |
| 50 | 75 |
| 100 | 100 |
| 200 | 150 |
| 300 | 200 |
| 400 | 250 |
_____________ is the minimum level of consumption done at zero income level and is independent of income.
Correct Answer
Option 1
Correct Answer
Q26:
2 June Shift 1
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Calculate various parameters of Aggregate Demand, Aggregate Supply and related concepts
| Income (in ₹ Crore) | Consumption (in ₹ Crore) |
| ------------------- | ------------------------ |
| 0 | 50 |
| 50 | 75 |
| 100 | 100 |
| 200 | 150 |
| 300 | 200 |
| 400 | 250 |
Calculate Marginal Propensity to Save (MPS) and Average Propensity to Consume (APC) at income level of 200.
Correct Answer
Option 3
Correct Answer
Q27:
31 May Shift 1
Macro > Income & Employment
Medium
Arrange the following statements in sequential order. (A) Aggregate demand will increase. (B) Induce the public to borrow more. (C) Central Bank will decrease the reverse repo rate. (D) Ex-ante aggregate demand is less than Ex-ante aggregate supply Choose the correct answer from the options given below: 1. (A), (B), (C), (D) 2. (A), (C), (B), (D) 3. (D), (C), (B), (A) 4. (A), (B), (D), (C)
Correct Answer
Option 3
Correct Answer
Q28:
31 May Shift 1
Macro > Income & Employment
Easy
How much consumption will increase when income increases by Rs. 5000 at given marginal propensity to consume of 0.60. 1. Increase in consumption= Rs. 5000 2. Increase in consumption= Rs. 4000 3. Increase in consumption= Rs. 3000 4. Increase in consumption= Rs. 2000
Correct Answer
Option 3
Correct Answer
Q29:
31 May Shift 1
Macro > Income & Employment
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) An increase in proportional taxes | (I) Decreases consumption by MPC times the change in taxes. | | (B) An increase in lump-sum taxes | (II) Automatic Stabilizer. | | (C) Proportional income tax | (III) Aggregate demand curve shift inwards. | | (D) Lump sum taxes | (IV) Do not depend upon income. | Choose the correct answer from the options given below: 1. (A) - (I), (B) - (II), (C) - (III), (D) - (IV) 2. (A) - (I), (B) - (III), (C) - (II), (D) - (IV) 3. (A) - (III), (B) - (I), (C) - (II), (D) - (IV) 4. (A) - (III), (B) - (I), (C) - (IV), (D) - (II)
Correct Answer
Option 3
Correct Answer
Q30:
31 May Shift 1
Macro > Income & Employment
Easy
In the consumption function $C = \bar{C} + cY$; autonomous consumption denoted by: 1. $C$ 2. $cY$ 3. $\bar{C}$ 4. $Y$
Correct Answer
Option 3
Correct Answer
Q31:
31 May Shift 1
Macro > Income & Employment
Hard
Arrange the following statements in chronological order in respect to the increase in the proportion of income people save. (A) Marginal propensity to consume decreases. (B) The level of income decreases. (C) The amount of savings remains the same. (D) The aggregate demand curve shifts downwards. Choose the correct answer from the options given below: 1. (A), (B), (C), (D) 2. (A), (C), (B), (D) 3. (B), (A), (D), (C) 4. (A), (D), (B), (C)
Correct Answer
Option 4
Correct Answer
Q32:
31 May Shift 1
Macro > Income & Employment
Medium
When autonomous investment increases in a two-sector model, then. 1. The aggregate demand curve shifts upwards. 2. Output/GDP increases by the same magnitude as the change in investment. 3. Autonomous expenditure increases by the same magnitude as the change in investment. 4. The consumption curve shifts upwards.
Correct Answer
Option 1
Correct Answer
Q33:
31 May Shift 1
Macro > Income & Employment
Medium
Among the following, what is assumed as the appropriate justification for taking the price level as fixed? 1. An economy with unskilled workforce. 2. An economy having scarcity of resources. 3. An economy with excess use of resources. 4. An economy with unused resources.
Correct Answer
Option 4
Correct Answer
Q34:
31 May Shift 1
Macro > Income & Employment
Medium
From the following figure, how to obtain an aggregate demand function? <img src="https://balti.afterboards.in/VKG8sv7aqzXUhhY" width="300px"/>
Correct Answer
Option 4
Correct Answer
Q35:
30 May Shift 2
Macro > Income & Employment
Medium
By what value equilibrium output and aggregate demand will change, when the value of parameter c changes from 0.8 to 0.5 at a given A = 50?
Correct Answer
Option 3
Correct Answer
Q36:
30 May Shift 2
Macro > Income & Employment
Medium
If all the people in the economy increase the proportion of income they save, the total value of savings in the economy will not increase – it will either decline or remain unchanged. This situation is known as...................
Correct Answer
Option 2
Correct Answer
Q37:
30 May Shift 2
Macro > Income & Employment
Medium
The ratio of the total increment in equilibrium value of final goods output to the initial increment in autonomous expenditure is called...................
Correct Answer
Option 2
Correct Answer
Q38:
30 May Shift 2
Macro > Income & Employment
Medium
If the government changes transfer payments ($\overline{TR}$), autonomous spending ($A$) will change by?
Correct Answer
Option 2
Correct Answer
Q39:
30 May Shift 2
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Determination of Income and Employment
When, at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity we assume a constant final goods price and constant rate of interest over short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. An increase in autonomous spending causes aggregate output of final goods to increase by a larger amount through the multiplier process. Full employment level of income is that level of income where all the factors of production are fully employed in the production process. The equilibrium attained at the point of equality of Y and AD by itself does not signify full employment of resources. Equilibrium only means that if left to itself the level of income in the economy will not change even when there is unemployment in the economy. The equilibrium level of output may be more or less than the full employment level of output.
A change in autonomous spending causes aggregate output of final goods to change by a large or small amount due to?
Correct Answer
Option 4
Correct Answer
Q40:
30 May Shift 2
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Determination of Income and Employment
When, at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity we assume a constant final goods price and constant rate of interest over short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. An increase in autonomous spending causes aggregate output of final goods to increase by a larger amount through the multiplier process. Full employment level of income is that level of income where all the factors of production are fully employed in the production process. The equilibrium attained at the point of equality of Y and AD by itself does not signify full employment of resources. Equilibrium only means that if left to itself the level of income in the economy will not change even when there is unemployment in the economy. The equilibrium level of output may be more or less than the full employment level of output.
When the aggregate output is determined solely by the level of aggregate demand. Then what it called?
Correct Answer
Option 3
Correct Answer
Q41:
30 May Shift 2
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Determination of Income and Employment
When, at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity we assume a constant final goods price and constant rate of interest over short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. An increase in autonomous spending causes aggregate output of final goods to increase by a larger amount through the multiplier process. Full employment level of income is that level of income where all the factors of production are fully employed in the production process. The equilibrium attained at the point of equality of Y and AD by itself does not signify full employment of resources. Equilibrium only means that if left to itself the level of income in the economy will not change even when there is unemployment in the economy. The equilibrium level of output may be more or less than the full employment level of output.
What is the equilibrium output when autonomous investment increases from 10 to 20 at a given C = 40 + 0.8Y?
Correct Answer
Option 2
Correct Answer
Q42:
30 May Shift 2
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Determination of Income and Employment
When, at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity we assume a constant final goods price and constant rate of interest over short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. An increase in autonomous spending causes aggregate output of final goods to increase by a larger amount through the multiplier process. Full employment level of income is that level of income where all the factors of production are fully employed in the production process. The equilibrium attained at the point of equality of Y and AD by itself does not signify full employment of resources. Equilibrium only means that if left to itself the level of income in the economy will not change even when there is unemployment in the economy. The equilibrium level of output may be more or less than the full employment level of output.
If the equilibrium level of output is more than the full employment level, it is due to the fact that the demand is more than the level of output produced at full employment level. This situation is called as.............
Correct Answer
Option 1
Correct Answer
Q43:
30 May Shift 2
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Determination of Income and Employment
When, at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity we assume a constant final goods price and constant rate of interest over short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. An increase in autonomous spending causes aggregate output of final goods to increase by a larger amount through the multiplier process. Full employment level of income is that level of income where all the factors of production are fully employed in the production process. The equilibrium attained at the point of equality of Y and AD by itself does not signify full employment of resources. Equilibrium only means that if left to itself the level of income in the economy will not change even when there is unemployment in the economy. The equilibrium level of output may be more or less than the full employment level of output.
Which parameter does not determine the income and employment in the economy.
Correct Answer
Option 3
Correct Answer
Q44:
30 May Shift 1
Macro > Income & Employment
Medium
Arrange the following steps in the correct sequence to explain the working of Multiplier. (A) Increase in income and consumption. (B) Increase in investment. (C) Rise in aggregate demand in each round (D) Generation of additional income. Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q45:
30 May Shift 1
Macro > Income & Employment
Medium
At the equilibrium point when C=100+0.5 Y and I= 200, saving will be........................
Correct Answer
Option 3
Correct Answer
Q46:
30 May Shift 1
Macro > Income & Employment
Easy
When consumer consumes a part of change in income, which of the following is true?
Correct Answer
Option 4
Correct Answer
Q47:
30 May Shift 1
Macro > Income & Employment
Medium
A perfectly elastic aggregate supply curve implies that: (A) There is fuller utilization of resources in the economy. (B) There is unemployment of resources in the economy. (C) There is excess capacity in the economy. (D) Aggregate demand is less in the economy. Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q48:
30 May Shift 1
Macro > Income & Employment
Easy
Level of planned output coincides with planned expenditure when: (AD = Aggregate Demand. AS= Aggregate Suplly)
Correct Answer
Option 1
Correct Answer
Q49:
30 May Shift 1
Macro > Income & Employment
Medium
In an economy , the aggregate demand function is given by AD= 80 + 0.75 Y. What will be the value of investment multiplier?
Correct Answer
Option 4
Correct Answer
Q50:
30 May Shift 1
Macro > Income & Employment
Medium
In an Economy , total savings are rs. 2000 crores and the ratio of average propensity to save and average propensity to consume is 2: 7. Calculate the level of income in the economy?
Correct Answer
Option 3
Correct Answer
Q51:
29 May Shift 2
Macro > Income & Employment
Medium
In which year, the book 'The Economic Consequences of the Peace' was written by John Maynard Keynes.
Correct Answer
Option 2
Correct Answer
Q52:
29 May Shift 2
Macro > Income & Employment
Medium
If the marginal propensity to consume is 0.6. Then what will be the value of tax multiplier?
Correct Answer
Option 4
Correct Answer
Q53:
29 May Shift 2
Macro > Income & Employment
Medium
When aggregate output is determined solely by the level of aggregate demand, the relation between aggregate supply and price is?
Correct Answer
Option 3
Correct Answer
Q54:
29 May Shift 2
Macro > Income & Employment
Medium
The ratio of the total increment in equilibrium value of final goods output to the initial increment in autonomous investment expenditure is known as?
Correct Answer
Option 1
Correct Answer
Q55:
29 May Shift 2
Macro > Income & Employment
Medium
Suppose autonomous investment and consumption expenditure (A) in a hypothetical economy is ₹50 crores. MPS is 0.2 and the level of income is ₹4000 crores. The value of ex-ante aggregate demand would be _________
Correct Answer
Option 3
Correct Answer
Q56:
29 May Shift 2
Macro > Income & Employment
Easy
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Aggregate Demand and Its Components
Consumption may denote not what people have actually consumed in a given year, but what they had planned to consume during the same period. Similarly, investment can mean the amount a producer plans to add to her inventory. It may be different from what she ends up doing. The planned values of the variables are called their ex ante measures. The most important determinant of consumption demand is household income. A consumption function describes the relation between consumption and income. The simplest consumption function assumes that consumption changes at a constant rate as income changes. Of course, even if income is zero, some consumption still takes place. Since this level of consumption is independent of income, it is called autonomous consumption. The induced component of consumption, cY shows the dependence of consumption on income.
Which one is not the component of a aggregate demand for final goods?
Correct Answer
Option 1
Correct Answer
Q57:
29 May Shift 2
Macro > Income & Employment
Easy
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Aggregate Demand and Its Components
Consumption may denote not what people have actually consumed in a given year, but what they had planned to consume during the same period. Similarly, investment can mean the amount a producer plans to add to her inventory. It may be different from what she ends up doing. The planned values of the variables are called their ex ante measures. The most important determinant of consumption demand is household income. A consumption function describes the relation between consumption and income. The simplest consumption function assumes that consumption changes at a constant rate as income changes. Of course, even if income is zero, some consumption still takes place. Since this level of consumption is independent of income, it is called autonomous consumption. The induced component of consumption, cY shows the dependence of consumption on income.
In a given consumption function C=50+0.5Y, autonomous consumption is.
Correct Answer
Option 2
Correct Answer
Q58:
29 May Shift 2
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Aggregate Demand and Its Components
Consumption may denote not what people have actually consumed in a given year, but what they had planned to consume during the same period. Similarly, investment can mean the amount a producer plans to add to her inventory. It may be different from what she ends up doing. The planned values of the variables are called their ex ante measures. The most important determinant of consumption demand is household income. A consumption function describes the relation between consumption and income. The simplest consumption function assumes that consumption changes at a constant rate as income changes. Of course, even if income is zero, some consumption still takes place. Since this level of consumption is independent of income, it is called autonomous consumption. The induced component of consumption, cY shows the dependence of consumption on income.
Savings are that part of income that is not consumed. What is the marginal propensity to save?
Correct Answer
Option 4
Correct Answer
Q59:
29 May Shift 2
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Aggregate Demand and Its Components
Consumption may denote not what people have actually consumed in a given year, but what they had planned to consume during the same period. Similarly, investment can mean the amount a producer plans to add to her inventory. It may be different from what she ends up doing. The planned values of the variables are called their ex ante measures. The most important determinant of consumption demand is household income. A consumption function describes the relation between consumption and income. The simplest consumption function assumes that consumption changes at a constant rate as income changes. Of course, even if income is zero, some consumption still takes place. Since this level of consumption is independent of income, it is called autonomous consumption. The induced component of consumption, cY shows the dependence of consumption on income.
Which of the following is not correct for marginal propensity to consume?
Correct Answer
Option 3
Correct Answer
Q60:
29 May Shift 2
Macro > Income & Employment
Medium
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Aggregate Demand and Its Components
Consumption may denote not what people have actually consumed in a given year, but what they had planned to consume during the same period. Similarly, investment can mean the amount a producer plans to add to her inventory. It may be different from what she ends up doing. The planned values of the variables are called their ex ante measures. The most important determinant of consumption demand is household income. A consumption function describes the relation between consumption and income. The simplest consumption function assumes that consumption changes at a constant rate as income changes. Of course, even if income is zero, some consumption still takes place. Since this level of consumption is independent of income, it is called autonomous consumption. The induced component of consumption, cY shows the dependence of consumption on income.
Machines produced in an economy in a given year are a part of ................
Correct Answer
Option 4
Correct Answer
Q61:
29 May Shift 1
Macro > Income & Employment
Medium
In graphical representation, how is the aggregate demand function obtained?
Correct Answer
Option 1
Correct Answer
Q62:
29 May Shift 1
Macro > Income & Employment
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) Ex-post investment | (I) AD function shifts upward | | (B) Investment multiplier | (II) Planned Investment + Unplanned Investment | | (C) Ex ante aggregate demand | (III) 1/1- MPC | | (D) Owing to increase in investment | (IV) $I = c + cY$ | Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q63:
29 May Shift 1
Macro > Income & Employment
Easy
Suppose in a hypothetical economy ,the income rises from ₹5000 crores to ₹6000 crores. As a result, the consumption expenditure rises from ₹4000 cores to ₹4600 crores. Then what will be the marginal propensity to consume?
Correct Answer
Option 4
Correct Answer
Q64:
29 May Shift 1
Macro > Income & Employment
Medium
If Multiplier is 2.5,how much investment will be required to generate additional income of 1000 crores?
Correct Answer
Option 2
Correct Answer
Q65:
29 May Shift 1
Macro > Income & Employment
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) Inflationary gap | (I) A cause of deficiency of AD | | (B) Decline in exports | (II) A monetary measure to correct disequilibrium between AD and AS | | (C) Cash reserve ratio | (III) Pursued by the government of the country | | (D) Fiscal policy | (IV) There is no unemployment or underemployment in the country | Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q66:
29 May Shift 1
Macro > Income & Employment
Medium
Arrange the following in correct sequence according to their occurance. (A) Reduction in cash reserve ratio by the Reserve Bank. (B) Involuntary unemployment situation in the economy. (C) Increase in credit availability in the capital market. (D) Aggregate demand falls short of aggregate supply, corresponding to full employment in the economy. Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q67:
29 May Shift 1
Macro > Income & Employment
Medium
Among the following identify the condition where firms face unplanned de-cumulation of inventories.
Correct Answer
Option 1
Correct Answer
Q68:
29 May Shift 1
Macro > Income & Employment
Medium
What are the equilibrium conditions in the Keynesian model of income determination? (A) Aggregate demand = Aggregate supply. (B) Savings= Investment. (C) Consumption=Government Expenditure. (D) Planned Expenditure= Planned Output. Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q69:
28 May Shift 2
Macro > Income & Employment
Hard
Determination of income and employment of a two-sector model is done by: (A) Ex-ante aggregate demand for final goods. (B) Ex-post aggregate demand for final goods. (C) Fixed price of final goods. (D) Constant rate of interest. Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q70:
28 May Shift 2
Macro > Income & Employment
Medium
When $C = 70 + 0.5Y$ and $I = 40$, what is the equilibrium income?
Correct Answer
Option 3
Correct Answer
Q71:
28 May Shift 2
Macro > Income & Employment
Medium
Identify the situation in which the equilibrium level of output is less than the full employment level of output?
Correct Answer
Option 4
Correct Answer
Q72:
28 May Shift 2
Macro > Income & Employment
Medium
Arrange the following statement in the context of the effect of an autonomous change in aggregate demand on income and output. (A) When autonomous investment increases, the aggregate demand shifts in parallel upwards. (B) Equilibrium level of income depends on aggregate demand. (C) Excess demand emerges in the economy. (D) The output will be greater than the original output. Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q73:
28 May Shift 2
Macro > Income & Employment
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) MPS | (I) $C/Y$ | | (B) MPC | (II) $\bar{C} + cY$ | | (C) APC | (III) $1 - c$ | | (D) Consumption function (C) | (IV) $\Delta C/\Delta Y$ | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q74:
28 May Shift 2
Macro > Income & Employment
Medium
In the consumption equation, the slope of the consumption function is represented as:
Correct Answer
Option 1
Correct Answer
Q75:
28 May Shift 1
Macro > Income & Employment
Easy
According to ___________, if the marginal propensity to save in the economy increases, the total value of saving in the economy will not increase.
Correct Answer
Option 4
Correct Answer
Q76:
28 May Shift 1
Macro > Income & Employment
Medium
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 (C) Y = 50 + 0.8Y (D) Y = 250 Choose the correct answer from the options given below: 1. (A), (B), (C), (D) 2. (A), (C), (B), (D) 3. (B), (A), (D), (C) 4. (C), (B), (D), (A)
Correct Answer
Option 2
Correct Answer
Q77:
28 May Shift 1
Macro > Income & Employment
Medium
Arrange the following as per the theory of the 'Paradox of Thrift': (A) Marginal Propensity to consume decreases. (B) Amount of savings decreases. (C) People become more thrifty. (D) Equilibrium level of income decreases. Choose the correct answer from the options given below: 1. (C), (A), (D), (B) 2. (A), (C), (B), (D) 3. (B), (A), (C), (D) 4. (C), (B), (A), (D)
Correct Answer
Option 1
Correct Answer
Q78:
28 May Shift 1
Macro > Income & Employment
Easy
The General Theory of Employment, Interest and Money was published in......... and by ............. 1. 2025, Adam Smith. 2. 1935, John Maynard Keynes. 3. 1936, John Maynard Keynes. 4. 1932, David Ricardo.
Correct Answer
Option 3
Correct Answer
Q79:
28 May Shift 1
Macro > Income & Employment
Easy
Match List-I with List-II | List-I | List-II | |---|---| | A. MPS | I. Saving Per unit of Income. | | B. MPC | II. Consumption per unit of Income | | C. APS | III. Change in consumption per unit change in income. | | D. APC | IV. Change in savings per unit change in income. | Choose the correct answer from the options given below: 1. (A) - (I), (B) - (II), (C) - (III), (D) - (IV) 2. (A) - (I), (B) - (III), (C) - (II), (D) - (IV) 3. (A) - (IV), (B) - (III), (C) - (I), (D) - (II) 4. (A) - (III), (B) - (IV), (C) - (I), (D) - (II)
Correct Answer
Option 3
Correct Answer
Q80:
27 May Shift 2
Macro > Income & Employment
Easy
________ is the ratio of the total increment in equilibrium value of final goods output to the initial increment in autonomous expenditure of the economy.
Correct Answer
Option 2
Correct Answer
Q81:
27 May Shift 2
Macro > Income & Employment
Medium
The equilibrium level of output may be more or less than the full employment level of output. If it is less than the full employment of output, it is due to the fact that demand is not enough to employ all factors of production. This situation is called ......
Correct Answer
Option 3
Correct Answer
Q82:
27 May Shift 2
Macro > Income & Employment
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) Final goods market | (I) A + cY | | (B) Consumers demand | (II) ΔY/ΔA | | (C) Investment multiplier | (III) Ĉ + cY | | (D) Linear equation | (IV) a + bX | Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q83:
27 May Shift 2
Macro > Income & Employment
Medium
The equilibrium level of income depends on aggregate demand. Thus, if aggregate demand changes, the equilibrium level of income changes. This can happen in anyone or combination of the following situations: (A) Change in autonomous consumption. (B) Change in marginal propensity to consume. (C) Income. (D) Change in autonomous investment. Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q84:
27 May Shift 2
Macro > Income & Employment
Easy
______ level of income is that level of income where all the factors of production are fully employed in the production process.
Correct Answer
Option 3
Correct Answer
Q85:
27 May Shift 2
Macro > Income & Employment
Medium
In macroeconomic theory, which is not justification for taking the price level as fixed.
Correct Answer
Option 4
Correct Answer
Q86:
27 May Shift 2
Macro > Income & Employment
Medium
Arrange the following statements about the effect of an increase in taxes on total income and output. (A) An increase in taxes decreases disposable income. (B) Aggregate demand schedule shifts downwards. (C) Aggregate expenditure changes by a fraction of tax deduction. (D) Equilibrium output decreases.
Correct Answer
Option 2
Correct Answer
Q87:
27 May Shift 2
Macro > Income & Employment
Medium
The value that marginal rate of propensity can take in consumption function.
Correct Answer
Option 1
Correct Answer
Q88:
27 May Shift 2
Macro > Income & Employment
Medium
Arrange the following statements when autonomous investment increases.. (A) The autonomous expenditure increases. (B) Aggregate demand and output have a multiplier effect. (C) Income and output increases. (D) The aggregate demand curve shifts parallel upward. Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q89:
26 May Shift 2
Macro > Income & Employment
Medium
Full employment, in context of determination of income, implies?
Correct Answer
Option 2
Correct Answer
Q90:
26 May Shift 2
Macro > Income & Employment
Medium
Deficient demand is said to exist in the economy when-
Correct Answer
Option 4
Correct Answer
Q91:
26 May Shift 2
Macro > Income & Employment
Medium
In an imaginary economy, the planned spending falls short of planned output at a certain level of employment. Arrange the following consequences of the same in sequential order. (A) Unintended accumulation of inventories. (B) The employment level falls. (C) The output and income fall and the equilibrium is restored. (D) Producers plan to produce less in the next period. Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q92:
26 May Shift 2
Macro > Income & Employment
Medium
The saving function of a two sector economy is given as S=(-)100+0.2Y. The equilibrium level of income of this economy is 1000, then calculate the value of consumption at equilibrium?
Correct Answer
Option 3
Correct Answer
Q93:
26 May Shift 2
Macro > Income & Employment
Medium
The ratio of increase in income to increase in investment is termed as
Correct Answer
Option 4
Correct Answer
Q94:
26 May Shift 2
Macro > Income & Employment
Medium
The increase in income in an economy is four times more than the increase in investment. What is the value of marginal propensity to consume in this economy?
Correct Answer
Option 3
Correct Answer
Q95:
26 May Shift 2
Macro > Income & Employment
Medium
If the entire additional income is saved in an economy, the value of investment multiplier will be
Correct Answer
Option 2
Correct Answer
Q96:
26 May Shift 2
Macro > Income & Employment
Medium
Arrange the following in chronological order, starting from the earliest. (A) Publishing of 'An inquiry into the Nature and Cause of the Wealth of Nations'. (B) The Great Depression. (C) Publishing of 'The Economic consequences of the Peace'. (D) Publishing of 'General Theory of Employment, Interest and Money'. Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q97:
22 May Shift 2
Macro > Income & Employment
Medium
Assume that the marginal propensity to consume is 0.8. The tax multiplier will then be ............... ?
Correct Answer
Option 2
Correct Answer
Q98:
22 May Shift 2
Macro > Income & Employment
Medium
Aggregate demand for final goods consists which of the following? (A) Ex-ante consumption. (B) Ex-ante Investment. (C) Government spending. (D) Effective demand. Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q99:
22 May Shift 2
Macro > Income & Employment
Medium
"General Theory of Employment, Interest and Money" by John Maynard Keynes was written in?
Correct Answer
Option 2
Correct Answer
Q100:
22 May Shift 1
Macro > Income & Employment
Medium
Arrange the following statement considering the effects on total income and output when the government purchases (G) increase keeping taxes constant. (A). Planned aggregate expenditure will increase. (B). When G exceeds T, the government runs a deficit. (C). Equilibrium income will increase. (D). Aggregate demand schedule shifts rightward. Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q101:
22 May Shift 1
Macro > Income & Employment
Medium
......... is the situation where the equilibrium level of output is less than the full employment of output.
Correct Answer
Option 3
Correct Answer
Q102:
22 May Shift 1
Macro > Income & Employment
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A). Marginal propensity to consume (MPC) | (I). C/ Y | | (B). Consumption function | (II). C + I | | (C). Average propensity to consume (APC) | (III). ΔC/ ΔY | | (D). Aggregate Demand | (IV). C = c + cY | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q103:
22 May Shift 1
Macro > Income & Employment
Medium
Which of the following statements are true: (A) Average propensity to consume is the change in consumption per unit to change in income. (B) Ex-ante depicts what has been planned. (C) Ceteris paribus means 'other things remain equal'. (D) Ex-post depicts what has actually happened. Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q104:
22 May Shift 1
Macro > Income & Employment
Medium
Determination of Income and Employment
When, at a particular price level, the aggregate demand for final goods equals the aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity, we assume a constant final goods price and constant rate of interest over the short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as the effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.
The equilibrium in the final goods or production market reaches when .......
Correct Answer
Option 1
Correct Answer
Q105:
22 May Shift 1
Macro > Income & Employment
Medium
Determination of Income and Employment
When, at a particular price level, the aggregate demand for final goods equals the aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity, we assume a constant final goods price and constant rate of interest over the short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as the effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.
Consumption, investment and government spending are the major components of ......?
Correct Answer
Option 2
Correct Answer
Q106:
22 May Shift 1
Macro > Income & Employment
Medium
Determination of Income and Employment
When, at a particular price level, the aggregate demand for final goods equals the aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity, we assume a constant final goods price and constant rate of interest over the short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as the effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.
In the short run, to determine the level of aggregate demand for final goods in the economy, what will be the affect on price and rate of interest?
Correct Answer
Option 2
Correct Answer
Q107:
22 May Shift 1
Macro > Income & Employment
Medium
Determination of Income and Employment
When, at a particular price level, the aggregate demand for final goods equals the aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity, we assume a constant final goods price and constant rate of interest over the short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as the effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.
Effective demand principle situation occurs when _________
Correct Answer
Option 3
Correct Answer
Q108:
22 May Shift 1
Macro > Income & Employment
Medium
Determination of Income and Employment
When, at a particular price level, the aggregate demand for final goods equals the aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity, we assume a constant final goods price and constant rate of interest over the short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as the effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.
A decrease in autonomous spending causes aggregate output of final goods to .................... through the multiplier process.
Correct Answer
Option 2
Correct Answer
Q109:
21 May Shift 1
Macro > Income & Employment
Medium
The aggregate demand curve of an economy is parallel to X axis. What will be the value of investment multiplier in this economy?
Correct Answer
Option 1
Correct Answer
Q110:
21 May Shift 1
Macro > Income & Employment
Medium
A hypothetical economy tends to save only 25% of its additional income. How much additional income would be generated by it if the investment is increased by 50 crores?
Correct Answer
Option 3
Correct Answer
Q111:
21 May Shift 1
Macro > Income & Employment
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) Effective demand | (I) National Income | | (B) Say's law of markets | (II) Aggregate demand exceeds aggregate supply at full employment | | (C) Inflationary gap | (III) Supply creates its own demand | | (D) Aggregate supply | (IV) Aggregate demand at equilibrium level | Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q112:
21 May Shift 1
Macro > Income & Employment
Medium
In a hypothetical economy, the consumption function is given as C = 100 + 0.75Y. The autonomous investment in the economy is 200 crores. The equilibrium level of income would be______?
Correct Answer
Option 1
Correct Answer
Q113:
21 May Shift 1
Macro > Income & Employment
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) Marginal propensity to save | (I) Slope of consumption function | | (B) Marginal propensity to consume | (II) Value is 1 at the break even point of the economy | | (C) Investment Multiplier | (III) Reciprocal of marginal propensity to save | | (D) Average propensity to consume | (IV) 1- c | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q114:
21 May Shift 1
Macro > Income & Employment
Medium
At the present level of employment in a hypothetical economy, the aggregate demand is falling short of aggregate supply. What will be the likely change in the level of national income of this economy?
Correct Answer
Option 2
Correct Answer
Q115:
21 May Shift 1
Macro > Income & Employment
Medium
In an economy, the consumption curve and saving curve are parallel to each other. What will be the value of investment multiplier in this economy?
Correct Answer
Option 2
Correct Answer
Q116:
16 May Shift 1
Macro > Income & Employment
Medium
If aggregate demand falls after reaching full employment equilibrium, what will be the likely impact on the economy?
Correct Answer
Option 4
Correct Answer
Q117:
16 May Shift 1
Macro > Income & Employment
Medium
At the short run equilibrium of income and employment, __________.
Correct Answer
Option 3
Correct Answer
Q118:
16 May Shift 1
Macro > Income & Employment
Medium
Which of the following are components of aggregate demand? (A) Autonomous Investment (B) Autonomous Consumption (C) Induced investment (D) Induced consumption Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q119:
16 May Shift 1
Macro > Income & Employment
Easy
Match List-I with List-II | List-I | List-II | |---|---| | (A) Average Propensity to Consume | (I) It is the savings per unit of income | | (B) Marginal Propensity to Consume | (II) It is the consumption per unit of income | | (C) Average Ppropensity to Save | (III) It is the change in savings per unit change in income | | (D) Marginal Propensity to Save | (IV) It is the change in consumption per unit change in income. | Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q120:
16 May Shift 1
Macro > Income & Employment
Medium
If there is an increase in investment by Rs100 in an economy, MPC = 0.9, choose the correct sequence with reference to the working of the investment multiplier. (A) Producers increase their planned output further by (0.9)10, the income of the economy goes up by (0.9)10 and consumption demand increases further by (0.9)² 10. (B) This process goes on, round after round. (C) Income increases by 100, Consumption expenditure increases by 90 and therefore, aggregate demand goes up by 90. (D) The total increment in the income will be 1000. Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q121:
16 May Shift 1
Macro > Income & Employment
Medium
Put the alternatives given below in the sequence in which they occur to reach the equilibrium level of out put given that aggregate demand falls short of aggregate supply. (A) In this case, the firm has to run down existing inventories, which will lead to a fall in production and hence income. (B) Stocks will be piling up in the warehouses, causing unintended accumulation of inventories. (C) Ex- ante demand for final goods falls short of the output of final goods that the producers have planned to produce in a given year. (D) process continues till Ex- ante demand for final goods equals to ex -ante output of final goods Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q122:
16 May Shift 1
Macro > Income & Employment
Medium
Measure the level of ex-ante aggregate demand when autonomous investment and consumption expenditure (A) is Rs 80 crores, and MPC is 0.75.
Correct Answer
Option 3
Correct Answer
Q123:
15 May Shift 1
Macro > Income & Employment
Hard
Suppose at the initial equilibrium of $Y^*$, there is an exogenous or autonomous shift in peoples' expenditure pattern – they suddenly become more thrifty. What will be the sequential effect of the above on the economy? (A) The sudden decline in MPC will imply a decrease in aggregate consumption spending and hence in aggregate demand. (B) There emerges an excess supply in the economy, but that would mean a reduction in factor payments in the next round and hence a reduction in income. (C) There is no change in the total value of savings. (D) MPS of the economy increases, and hence MPC falls. Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q124:
15 May Shift 1
Macro > Income & Employment
Medium
If, in an economy, the minimum level of consumption is 45 and 80% of an increase in income(Y) is consumed, what will be the consumption function of this economy?
Correct Answer
Option 4
Correct Answer
Q125:
15 May Shift 1
Macro > Income & Employment
Easy
Given the equation of the consumption function as $C = \bar{C} + cY$, what does $\bar{C}$ donate?
Correct Answer
Option 4
Correct Answer
Q126:
15 May Shift 1
Macro > Income & Employment
Medium
The investment multiplier is equal to which of the following?
Correct Answer
Option 3
Correct Answer
Q127:
15 May Shift 1
Macro > Income & Employment
Medium
Which of the following statement is true?
Correct Answer
Option 4
Correct Answer
Q128:
15 May Shift 1
Macro > Income & Employment
Medium
Given that in an economy, consumption function is C = 80 + 0.80Y and autonomous investment (I) = 120, Match List-I with List-II | List-I | List-II | |---|---| | (A) Equilibrium level of income | (I) 400 | | (B) Break-even point | (II) 120 | | (C) Investment multiplier | (III) 5 | | (D) Value of savings at equilibrium | (IV) 1000 | Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q129:
15 May Shift 1
Macro > Income & Employment
Medium
In the excess demand condition, which of the following measures may be adopted in the economy to control it? (A) Increase in repo rate. (B) Decrease in reverse repo rate. (C) Sale of government securities in the open market. (D) Increase in subsidies. Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q130:
15 May Shift 1
Macro > Income & Employment
Medium
Aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. Which of the following is not the assumptions behind this principle?
Correct Answer
Option 4
Correct Answer
Q131:
15 May Shift 1
Macro > Income & Employment
Medium
Identify the correct expression to calculate equilibrium level of income of an economy.
Correct Answer
Option 2
Correct Answer
Q132:
14 May Shift 1
Macro > Income & Employment
Easy
Match List-I with List-II | List–I | List–II | | ---------------------------------- | ----------- | | (A) Marginal propensity to consume | (I) ΔS/ΔY | | (B) Marginal propensity to save | (II) ΔC/ΔY | | (C) Average propensity to consume | (III) S / Y | | (D) Average propensity to save | (IV) C / Y | Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q133:
13 May Shift 2
Macro > Income & Employment
Easy
Match List-I with List-II | List-I | List-II | |---|---| | (A) Marginal propensity to consume | (I) Change in savings per unit change in income. | | (B) Marginal propensity to save | (II) Savings per unit of income. | | (C) Average propensity to consume | (III) Change in consumption per unit change in income. | | (D) Average propensity to save | (IV) Consumption per unit of income. | Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q134:
13 May Shift 2
Macro > Income & Employment
Medium
If aggregate demand changes, the equilibrium level of income changes. This can happen in any one or combination of the following situations: (A) Change in consumption. (B) Multiplier Effect. (C) Substitute Effect. (D) Change in Investment. Choose the correct answer from the options given below:
Correct Answer
Option 1,4
Correct Answer
Q135:
13 May Shift 2
Macro > Income & Employment
Medium
In the closed economy the ex ante aggregate demand for final goods is the sum total of:
Correct Answer
Option 2
Correct Answer
Q136:
13 May Shift 2
Macro > Income & Employment
Medium
The ratio of the total increment in equilibrium value of final goods output to the initial increment in autonomous expenditure is called:
Correct Answer
Option 3
Correct Answer
Q137:
13 May Shift 1
Macro > Income & Employment
Easy
Who is the author of "The General Theory of Employment, Interest and Money"?
Correct Answer
Option 4
Correct Answer
Q138:
13 May Shift 1
Macro > Income & Employment
Hard
With keeping tax rate (T) constant if government purchases(G) increase, then arrange the following statement considering the effect on total income and output. (A) Rise in Plan Aggregate expenditure. (B) Government runs a deficit when G exceeds T. (C) Equilibrium income level increased. (D) Aggregate demand schedule shifts upward. Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q139:
13 May Shift 1
Macro > Income & Employment
Easy
Ex-post is depicted by which of the following ........
Correct Answer
Option 1
Correct Answer
Q140:
13 May Shift 1
Macro > Income & Employment
Medium
If all the people of the economy increase the proportion of income they save, the total value of savings in the economy will not increase - it will either decline or remain unchanged. This result is known as .......
Correct Answer
Option 2
Correct Answer
Q141:
13 May Shift 1
Macro > Income & Employment
Easy
Comprehension:
OUTPUT AND EMPLOYMENT
The equilibrium output in the economy also determines the level of employment, given the quantities of other factors of production (think of a production function at aggregate level). This means that the level of output determined by the equality of Y with AD does not necessarily mean the level of output at which everyone is employed. Full employment level of income is that level of income where all the factors of production are fully employed in the production process. Recall that equilibrium attained at the point of equality of Y(Income) and AD by itself does not signify full employment of resources. Equilibrium only means that, if left to itself, the level of income in the economy will not change even when there is unemployment in the economy. The equilibrium level of output may be more or less than the full employment level of output. If it is less than the full employment of output, it is due to the fact that demand is not enough to employ all factors of production. This situation is called the situation of deficient demand. It leads to a decline in prices in the long run. On the other hand, if the equilibrium level of output is more than the full employment level, it is due to the fact that the demand is more than the level of output produced at full employment level. This situation is called the situation of excess demand. It will lead to a rise in prices in the long run.
Excess demand is the situation where ......
Correct Answer
Option 3
Correct Answer
Q142:
13 May Shift 1
Macro > Income & Employment
Easy
Comprehension:
OUTPUT AND EMPLOYMENT
The equilibrium output in the economy also determines the level of employment, given the quantities of other factors of production (think of a production function at aggregate level). This means that the level of output determined by the equality of Y with AD does not necessarily mean the level of output at which everyone is employed. Full employment level of income is that level of income where all the factors of production are fully employed in the production process. Recall that equilibrium attained at the point of equality of Y(Income) and AD by itself does not signify full employment of resources. Equilibrium only means that, if left to itself, the level of income in the economy will not change even when there is unemployment in the economy. The equilibrium level of output may be more or less than the full employment level of output. If it is less than the full employment of output, it is due to the fact that demand is not enough to employ all factors of production. This situation is called the situation of deficient demand. It leads to a decline in prices in the long run. On the other hand, if the equilibrium level of output is more than the full employment level, it is due to the fact that the demand is more than the level of output produced at full employment level. This situation is called the situation of excess demand. It will lead to a rise in prices in the long run.
If output equilibrium is less than the full employment level, then this condition is known as:
Correct Answer
Option 1
Correct Answer
Q143:
13 May Shift 1
Macro > Income & Employment
Medium
Comprehension:
OUTPUT AND EMPLOYMENT
The equilibrium output in the economy also determines the level of employment, given the quantities of other factors of production (think of a production function at aggregate level). This means that the level of output determined by the equality of Y with AD does not necessarily mean the level of output at which everyone is employed. Full employment level of income is that level of income where all the factors of production are fully employed in the production process. Recall that equilibrium attained at the point of equality of Y(Income) and AD by itself does not signify full employment of resources. Equilibrium only means that, if left to itself, the level of income in the economy will not change even when there is unemployment in the economy. The equilibrium level of output may be more or less than the full employment level of output. If it is less than the full employment of output, it is due to the fact that demand is not enough to employ all factors of production. This situation is called the situation of deficient demand. It leads to a decline in prices in the long run. On the other hand, if the equilibrium level of output is more than the full employment level, it is due to the fact that the demand is more than the level of output produced at full employment level. This situation is called the situation of excess demand. It will lead to a rise in prices in the long run.
Level of employment is determined by which of the following?
Correct Answer
Option 1
Correct Answer
Q144:
13 May Shift 1
Macro > Income & Employment
Medium
Comprehension:
OUTPUT AND EMPLOYMENT
The equilibrium output in the economy also determines the level of employment, given the quantities of other factors of production (think of a production function at aggregate level). This means that the level of output determined by the equality of Y with AD does not necessarily mean the level of output at which everyone is employed. Full employment level of income is that level of income where all the factors of production are fully employed in the production process. Recall that equilibrium attained at the point of equality of Y(Income) and AD by itself does not signify full employment of resources. Equilibrium only means that, if left to itself, the level of income in the economy will not change even when there is unemployment in the economy. The equilibrium level of output may be more or less than the full employment level of output. If it is less than the full employment of output, it is due to the fact that demand is not enough to employ all factors of production. This situation is called the situation of deficient demand. It leads to a decline in prices in the long run. On the other hand, if the equilibrium level of output is more than the full employment level, it is due to the fact that the demand is more than the level of output produced at full employment level. This situation is called the situation of excess demand. It will lead to a rise in prices in the long run.
The level of output is determined by the .....
Correct Answer
Option 4
Correct Answer
Q145:
13 May Shift 1
Macro > Income & Employment
Easy
Comprehension:
OUTPUT AND EMPLOYMENT
The equilibrium output in the economy also determines the level of employment, given the quantities of other factors of production (think of a production function at aggregate level). This means that the level of output determined by the equality of Y with AD does not necessarily mean the level of output at which everyone is employed. Full employment level of income is that level of income where all the factors of production are fully employed in the production process. Recall that equilibrium attained at the point of equality of Y(Income) and AD by itself does not signify full employment of resources. Equilibrium only means that, if left to itself, the level of income in the economy will not change even when there is unemployment in the economy. The equilibrium level of output may be more or less than the full employment level of output. If it is less than the full employment of output, it is due to the fact that demand is not enough to employ all factors of production. This situation is called the situation of deficient demand. It leads to a decline in prices in the long run. On the other hand, if the equilibrium level of output is more than the full employment level, it is due to the fact that the demand is more than the level of output produced at full employment level. This situation is called the situation of excess demand. It will lead to a rise in prices in the long run.
Full employment level is the level where ........
Correct Answer
Option 3
Correct Answer
Q146:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Easy
When there is unexpected rise in the sales
Correct Answer
Option 3
Correct Answer
Q147:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Easy
During festive season, the currency deposit ratio
Correct Answer
Option 2
Correct Answer
Q148:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Easy
(A) Ex Ante Saving represents what is actually planned to save.
(B) Ex Post Saving represents what is actually planned to save.
(C) Ex Post Saving depicts what has actually happened.
(D) Ex Ante Post Saving represents what is actually saved.
Identify the correct set of statements
Correct Answer
Option 2
Correct Answer
Q149:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Easy
It is market where economic agents freely exchange their own goods:
Correct Answer
Option 1
Correct Answer
Q150:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Hard
(A) General theory of Employment, Interest and Money by Keynes.
(B) Mahalanobis was made a fellow of Britain's Royal Society.
(C) An Inquiry into the Nature and Cause of the Wealth of Nations by Adam Smith.
(D) The Economic Consequences of the Peace by Keynes.
Rearrange the given statements in proper chronological sequence in an ascending order (earliest to latest):
Correct Answer
Option 1
Correct Answer
Q151:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Hard
If there is no government and no foreign trade, then :
Correct Answer
Option 3
Correct Answer
Q152:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Medium
If the supply of final goods is assumed to be infinitely elastic at constant price over a short period of time, aggregate output is determined solely by the value of aggregate demand. This statement is called _________ Principle.
Correct Answer
Option 3
Correct Answer
Q153:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Easy
Value of MPS (Marginal Propensity to Save) is increased from 0.4 to 0.5. What would be the impact on Multiplier?
Correct Answer
Option 4
Correct Answer
Q154:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Hard
Paradox of Thrift means :
Correct Answer
Option 4
Correct Answer
Q155:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Easy
__________ depicts what has actually happened.
Correct Answer
Option 2
Correct Answer
Q156:
CUET Economics 2024 Slot 1
Macro > Income & Employment
Easy
If the value of Investment Multiplier is 5 and the increased income is ₹ 800 crore in an economy, then find the value of change in the investment in the economy.
Correct Answer
Option 4
Correct Answer
Q157:
CUET Economics 2023 Slot 6
Macro > Income & Employment
Easy
When at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product in market reaches its equilibrium. Aggregate demand for final goods consist of ex-ante consumption, ex-ante investment, government spending etc. The rate of increase in ex-ante consumption due to a unit increase in income is called marginal propensity to consume.
Equilibrium in product market achieved when.
Correct Answer
Option 1
Correct Answer
Q158:
CUET Economics 2023 Slot 6
Macro > Income & Employment
Easy
When at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product in market reaches its equilibrium. Aggregate demand for final goods consist of ex-ante consumption, ex-ante investment, government spending etc. The rate of increase in ex-ante consumption due to a unit increase in income is called marginal propensity to consume.
Aggregate demand for final goods doesn't include.
Correct Answer
Option 2
Correct Answer
Q159:
CUET Economics 2023 Slot 6
Macro > Income & Employment
Easy
When at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product in market reaches its equilibrium. Aggregate demand for final goods consist of ex-ante consumption, ex-ante investment, government spending etc. The rate of increase in ex-ante consumption due to a unit increase in income is called marginal propensity to consume.
MPC stands for.
Correct Answer
Option 2
Correct Answer
Q160:
CUET Economics 2023 Slot 6
Macro > Income & Employment
Easy
When at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product in market reaches its equilibrium. Aggregate demand for final goods consist of ex-ante consumption, ex-ante investment, government spending etc. The rate of increase in ex-ante consumption due to a unit increase in income is called marginal propensity to consume.
The sum total of MPC and MPS is always equal to:
Correct Answer
Option 3
Correct Answer
Q161:
CUET Economics 2023 Slot 5
Macro > Income & Employment
Medium
Find out correct one : (A) MPC is the change in consumption per unit change in income (B) MPS is the saving per unit of income (C) APC is the consumption per unit of income (D) APS is the change in saving per unit change in income Choose the correct answer from the options given below :
Correct Answer
Option 2
Correct Answer
Q162:
CUET Economics 2023 Slot 5
Macro > Income & Employment
Easy
When, at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, Government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity we assume a constant final goods price and constant rate of interest over short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.
Ex ante consumption implies :
Correct Answer
Option 1
Correct Answer
Q163:
CUET Economics 2023 Slot 5
Macro > Income & Employment
Easy
When, at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, Government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity we assume a constant final goods price and constant rate of interest over short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.
The shape of investment function when I is autonomous curve is represented through :
Correct Answer
Option 2
Correct Answer
Q164:
CUET Economics 2023 Slot 5
Macro > Income & Employment
Easy
When, at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, Government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity we assume a constant final goods price and constant rate of interest over short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.
The 'Effective Demand Principle' states that aggregate output is determined solely by :
Correct Answer
Option 3
Correct Answer
Q165:
CUET Economics 2023 Slot 5
Macro > Income & Employment
Easy
When, at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, Government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity we assume a constant final goods price and constant rate of interest over short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.
Which of the following is not one of the components of aggregate demand in the economy ?
Correct Answer
Option 2
Correct Answer
Q166:
CUET Economics 2023 Slot 5
Macro > Income & Employment
Easy
When, at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product market reaches its equilibrium. Aggregate demand for final goods consists of ex ante consumption, ex ante investment, Government spending etc. The rate of increase in ex ante consumption due to a unit increment in income is called marginal propensity to consume. For simplicity we assume a constant final goods price and constant rate of interest over short run to determine the level of aggregate demand for final goods in the economy. We also assume that the aggregate supply is perfectly elastic at this price. Under such circumstances, aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle. An increase (decrease) in autonomous spending causes aggregate output of final goods to increase (decrease) by a larger amount through the multiplier process.
The value of investment multiplier in an economy is determined by :
Correct Answer
Option 2
Correct Answer
Q167:
CUET Economics 2023 Slot 4
Macro > Income & Employment
Easy
Slope of Consumption curve is denoted by :
Correct Answer
Option 3
Correct Answer
Q168:
CUET Economics 2023 Slot 4
Macro > Income & Employment
Easy
If MPC and MPS are equal, then the value of multiplier is :
Correct Answer
Option 4
Correct Answer
Q169:
CUET Economics 2023 Slot 4
Macro > Income & Employment
Medium
Match List - I with List - II. | | List - I | | List - II | |---|---|---|---| | (A) | Marginal Propensity to Save | (I) | $\frac{\Delta Y}{\Delta I}$ | | (B) | Average Propensity to Consume | (II) | $\frac{\Delta S}{\Delta Y}$ | | (C) | Value of Investment Multiplier | (III) | 1 - APS | | (D) | Marginal Propensity to Consume | (IV) | $\frac{\Delta C}{\Delta Y}$ | Choose the correct answer from the options given below :
Correct Answer
Option 2
Correct Answer
Q170:
CUET Economics 2023 Slot 4
Macro > Income & Employment
Medium
Match List - I with List - II. | | List - I (Curves) | | List - II (Shape) | |---|---|---|---| | (A) | Aggregate demand curve | (I) | Upward sloping line with a positive intercept on y-axis | | (B) | Aggregate supply curve | (II) | Parallel to x axis | | (C) | Autonomous investment curve | (III) | 45 degree line passing through the origin | | (D) | Consumption function | (IV) | Parallel to consumption function | Choose the correct answer from the options given below :
Correct Answer
Option 4
Correct Answer
Q171:
CUET Economics 2023 Slot 4
Macro > Income & Employment
Medium
Regarding Average Propensity to save : (A) APS can be zero (B) APS can be more than one (C) APS can be negative (D) APS can be one (E) APS can be positive Choose the correct answer from the options given below :
Correct Answer
Option 1
Correct Answer
Q172:
CUET Economics 2023 Slot 3
Macro > Income & Employment
Medium
Deficit Demand Occurs when : (A) Equilibrium level of output is less than full employment level (B) When AD < AS (Aggregate Demand less than Aggregate Supply) (C) When output decreases (D) Demand is not enough to employ all factors of production (E) Prices will decline in the long run Choose the correct answer from the options given below :
Correct Answer
Option 1
Correct Answer
Q173:
CUET Economics 2023 Slot 3
Macro > Income & Employment
Easy
If all the people in the economy increase the proportion of income they save (i.e. is the MPS of the economy increases) then the total value of savings in the economy will not increase, it will either decline or remain unchanged. This result is known as Paradox of Thrift, which states that as people become more thrifty, they end up saving less or same as before. When there is an information about some impending disaster or imminent war, people suddenly become thrifty and MPS of the economy increases, which leads to a decrease in MPC This sudden decrease in MPC will imply a decrease in aggregate consumption and hence in aggregate demand. This can be regarded as autonomous reduction in consumption expenditure. As aggregate demand decreases stocks are piling up in warehouses and producers decide to cut value of production.
The Paradox of Thrift means :
Correct Answer
Option 1
Correct Answer
Q174:
CUET Economics 2023 Slot 3
Macro > Income & Employment
Easy
If all the people in the economy increase the proportion of income they save (i.e. is the MPS of the economy increases) then the total value of savings in the economy will not increase, it will either decline or remain unchanged. This result is known as Paradox of Thrift, which states that as people become more thrifty, they end up saving less or same as before. When there is an information about some impending disaster or imminent war, people suddenly become thrifty and MPS of the economy increases, which leads to a decrease in MPC This sudden decrease in MPC will imply a decrease in aggregate consumption and hence in aggregate demand. This can be regarded as autonomous reduction in consumption expenditure. As aggregate demand decreases stocks are piling up in warehouses and producers decide to cut value of production.
If all the people in economy increase savings, what will happen in the economy ?
Correct Answer
Option 1
Correct Answer
Q175:
CUET Economics 2023 Slot 3
Macro > Income & Employment
Easy
If all the people in the economy increase the proportion of income they save (i.e. is the MPS of the economy increases) then the total value of savings in the economy will not increase, it will either decline or remain unchanged. This result is known as Paradox of Thrift, which states that as people become more thrifty, they end up saving less or same as before. When there is an information about some impending disaster or imminent war, people suddenly become thrifty and MPS of the economy increases, which leads to a decrease in MPC This sudden decrease in MPC will imply a decrease in aggregate consumption and hence in aggregate demand. This can be regarded as autonomous reduction in consumption expenditure. As aggregate demand decreases stocks are piling up in warehouses and producers decide to cut value of production.
If MPS in the economy increases, what will be the effect on MPC of economy ?
Correct Answer
Option 2
Correct Answer
Q176:
CUET Economics 2023 Slot 3
Macro > Income & Employment
Easy
If all the people in the economy increase the proportion of income they save (i.e. is the MPS of the economy increases) then the total value of savings in the economy will not increase, it will either decline or remain unchanged. This result is known as Paradox of Thrift, which states that as people become more thrifty, they end up saving less or same as before. When there is an information about some impending disaster or imminent war, people suddenly become thrifty and MPS of the economy increases, which leads to a decrease in MPC This sudden decrease in MPC will imply a decrease in aggregate consumption and hence in aggregate demand. This can be regarded as autonomous reduction in consumption expenditure. As aggregate demand decreases stocks are piling up in warehouses and producers decide to cut value of production.
What will be the effect on stocks when aggregate demand decreases ?
Correct Answer
Option 2
Correct Answer
Q177:
CUET Economics 2023 Slot 3
Macro > Income & Employment
Easy
If all the people in the economy increase the proportion of income they save (i.e. is the MPS of the economy increases) then the total value of savings in the economy will not increase, it will either decline or remain unchanged. This result is known as Paradox of Thrift, which states that as people become more thrifty, they end up saving less or same as before. When there is an information about some impending disaster or imminent war, people suddenly become thrifty and MPS of the economy increases, which leads to a decrease in MPC This sudden decrease in MPC will imply a decrease in aggregate consumption and hence in aggregate demand. This can be regarded as autonomous reduction in consumption expenditure. As aggregate demand decreases stocks are piling up in warehouses and producers decide to cut value of production.
What will be the effect on Aggregate Demand when MPC decreases ?
Correct Answer
Option 1
Correct Answer
Q178:
CUET Economics 2023 Slot 2
Macro > Income & Employment
Easy
C=40+0.8Y and I =10, then what will be the equilibrium level of income?
Correct Answer
Option 4
Correct Answer
Q179:
CUET Economics 2023 Slot 2
Macro > Income & Employment
Medium
If C= X+0.6Y & Investment is Rs 1,500 Equilibrium level of income in economy would be 4050, find out the autonomous consumption.
Correct Answer
Option 3
Correct Answer
Q180:
CUET Economics 2023 Slot 2
Macro > Income & Employment
Easy
A country's consumption function described as C=500+ 0.7 Y the Autonomous consumption
Correct Answer
Option 2
Correct Answer
Q181:
CUET Economics 2023 Slot 2
Macro > Income & Employment
Easy
Identify the symbol that is used to denote autonomous consumption.
Correct Answer
Option 1
Correct Answer
Q182:
CUET Economics 2023 Slot 1
Macro > Income & Employment
Medium
Arrange the sequence of events relating to establishment of equilibrium in the economy. (A) This will cause unintended decumulation of inventories (B) This process continues till ex-ante aggregate demand becomes equal to ex-ante aggregate supply (C) The producers will respond by increasing output (D) If ex-ante demand for final goods by firms and households is greater than the output the producers plan to produce in a given year (E) When output increases, both employment and income rise Choose the correct answer from the options given below :
Correct Answer
Option 2
Correct Answer
Q183:
CUET Economics 2023 Slot 1
Macro > Income & Employment
Medium
The aggregate demand line shifts parallel upwards. The reason behind this is :
Correct Answer
Option 1
Correct Answer
Q184:
CUET Economics 2023 Slot 1
Macro > Income & Employment
Medium
Given AD = C + I + CY, change in autonomous consumption will lead to : (A) Change in equilibrium level of income (B) Change in aggregate demand (C) Change in Investment (D) Change in aggregate demand and no change in equilibrium level of income (E) Change in marginal propensity to consume Choose the correct answer from the options given below :
Correct Answer
Option 2
Correct Answer
Q185:
CUET Economics 2023 Slot 1
Macro > Income & Employment
Easy
At a particular price level, when aggregate demand for final goods equals aggregate supply of final goods, the product market reaches to its __________.
Correct Answer
Option 4
Correct Answer
Q186:
CUET Economics 2022 Slot 5
Macro > Income & Employment
Medium
Calculate autonomous consumption expenditure from the following data about an economy which is in equilibrium. National Income = Rs. 1000 Marginal propensity to save = 0.2 Investment expenditure = Rs. 150
Correct Answer
Option 4
Correct Answer
Q187:
CUET Economics 2022 Slot 5
Macro > Income & Employment
Easy
Given the consumption function of an economy C = 200 + 0.25 Y, what is the value of slope of the savings function ?
Correct Answer
Option 3
Correct Answer
Q188:
CUET Economics 2022 Slot 5
Macro > Income & Employment
Medium
Match List - I with List - II. | List - I | List - II | |---|---| | (A) MPC (Marginal Propensity to Consume) | (I) $\frac{\Delta Y}{\Delta I}$ | | (B) MPS (Marginal Propensity to Save) | (II) $\frac{\Delta C}{\Delta Y}$ | | (C) K (Multiplier) | (III) C + I | | (D) AD (Aggregate Demand) | (IV) $\frac{\Delta S}{\Delta Y}$ | Choose the correct answer from the options given below :
Correct Answer
Option 3
Correct Answer
Q189:
CUET Economics 2022 Slot 5
Macro > Income & Employment
Medium
What does breakeven point indicate ? (A) MPS = 0 (B) APC = 1 (C) MPS = 1 (D) APS = 0 Choose the correct answer from the options given below :
Correct Answer
Option 4
Correct Answer
Q190:
CUET Economics 2022 Slot 5
Macro > Income & Employment
Easy
From the equations given below, choose the equation which correctly represents the consumption function.
Correct Answer
Option 3
Correct Answer
Q191:
CUET Economics 2022 Slot 4
Macro > Income & Employment
Easy
Given the following set of data calculate equilibrium income. C = 100 + 0.8 y. Investment = Rs. 260 Cr.
Correct Answer
Option 4
Correct Answer
Q192:
CUET Economics 2022 Slot 4
Macro > Income & Employment
Easy
What would be the value of investment multiplier if MPC = MPS ?
Correct Answer
Option 3
Correct Answer
Q193:
CUET Economics 2022 Slot 4
Macro > Income & Employment
Easy
If MPC = 0.75, autonomous consumption = 100 crore, then find the level of consumption at income level = 8,000 crore :
Correct Answer
Option 2
Correct Answer
Q194:
CUET Economics 2022 Slot 4
Macro > Income & Employment
Medium
Suppose the producers plans to add Rs. 100 cr worth of goods to her stock by the end of the year. However, due to an unforeseen upsurge of demand for her goods in the market, she had to sell goods worth Rs. 30 cr from her existing stock. Now, determine Ex-ante Investment and Ex-post Investment from the above information.
Correct Answer
Option 2
Correct Answer
Q195:
CUET Economics 2022 Slot 4
Macro > Income & Employment
Medium
Which of the following is not a reason for excess demand ?
Correct Answer
Option 2
Correct Answer
Q196:
CUET Economics 2022 Slot 4
Macro > Income & Employment
Medium
Identify the statement that stands true during deficient demand : (A) Actual output falls short of potential output (B) Potential output falls short of actual output (C) Actual demand is less than expected demand (D) Expected demand is less than actual demand Choose the correct answer from the options given below :
Correct Answer
Option 2
Correct Answer
Q197:
CUET Economics 2022 Slot 4
Macro > Income & Employment
Easy
When consumption function starts from y axis, it indicates that ?
Correct Answer
Option 2
Correct Answer
Q198:
CUET Economics 2022 Slot 3
Macro > Income & Employment
Medium
__________ can never be negative while __________ can have value as 1.
Correct Answer
Option 4
Correct Answer
Q199:
CUET Economics 2022 Slot 3
Macro > Income & Employment
Medium
If the autonomous consumption is given as 100 and the tendency of the people to increase consumption for an increase in income is only 20%, then derive the savings function.
Correct Answer
Option 1
Correct Answer
Q200:
CUET Economics 2022 Slot 3
Macro > Income & Employment
Medium
Assume a two sector economy in the above diagram, the initial demand curve $AD_1$ shifts upward to $AD_2$ due to : <img src="https://balti.afterboards.in/fVmmFhxfvoHqTnE" width="250px"/>
Correct Answer
Option 4
Correct Answer
Q201:
CUET Economics 2022 Slot 3
Macro > Income & Employment
Easy
In an economy, every time the National Income rises 20% of the rises in income is saved by households. Now suppose there is a rise in investment by $\overline{\mathbf{\tau}}$ 100 crores, then the National Income in this economy will rise by :
Correct Answer
Option 2
Correct Answer
Q202:
CUET Economics 2022 Slot 3
Macro > Income & Employment
Easy
If the level of effective demand is much below the level of full employment equilibrium then which situation will appear in the economy ?
Correct Answer
Option 2
Correct Answer
Q203:
CUET Economics 2022 Slot 2
Macro > Income & Employment
Medium
Match List I with List II | LIST I (Concept under Theory of Income determination) | LIST II (Meaning) | |---|---| | A. Saving < Investment | I. When AD<AS | | B. $\frac{1}{1-mpc}$ | II. Under employment equilibrium | | C. National income will fall | III. Planned inventory would fall below the desired level | | D. AD=AS at a point less than full employment | IV. Multiplier | Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q204:
CUET Economics 2022 Slot 2
Macro > Income & Employment
Medium
Identify the correct statement from the following: A. Consumption curve starts from the origin B. The sum of APC and APS is equal to 1 C. Aggregate demand and market demand mean the same D. The value of MPC and MPS varies between 0 and 1 E. At breakeven point saving is zero Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q205:
CUET Economics 2022 Slot 2
Macro > Income & Employment
Medium
Identify the monetary invention that can Close the inflationary group:
Correct Answer
Option 2
Correct Answer
Q206:
CUET Economics 2022 Slot 2
Macro > Income & Employment
Easy
Actual aggregate demand's gap from that needed to achieve full employment equilibrium is referred to as:
Correct Answer
Option 2
Correct Answer
Q207:
CUET Economics 2022 Slot 2
Macro > Income & Employment
Easy
At equilibrium level of income in an economy:
Correct Answer
Option 3
Correct Answer
Q208:
CUET Economics 2022 Slot 2
Macro > Income & Employment
Easy
If the ratio between MPC and MPS is 4:1, the value of investment multiplier will be:
Correct Answer
Option 3
Correct Answer
Q209:
CUET Economics 2022 Slot 2
Macro > Income & Employment
Medium
In an economy if equilibrium level of national is Rs. 2000 crores, Autonomous consumption = Rs. 400 crores and Investment expenditure = Rs. 200 crores, then MPC will be:
Correct Answer
Option 4
Correct Answer
Q210:
CUET Economics 2022 Slot 2
Macro > Income & Employment
Medium
In an economy MPS=0.20 and investment is increased by Rs. 400 crores, than total increase in income is _____ Crores.
Correct Answer
Option 1
Correct Answer
Q211:
CUET Economics 2022 Slot 1
Macro > Income & Employment
Medium
Suppose a TV manufacturing unit wants to raise its inventories from 1000 units to 2000 units during the year. Expecting sale of 5000 units during the year, the firm produces 5000+1000= 6000 TV sets. Actual sale for the firm are 5000 TV sets during the year. This is an example of:
Correct Answer
Option 1
Correct Answer
Q212:
CUET Economics 2022 Slot 1
Macro > Income & Employment
Medium
In an Economy, AD = Rs.250 cr+0.6Y and at zero level of income consumption is Rs.150 crores The value of autonomous investment will be:
Correct Answer
Option 1
Correct Answer
Q213:
CUET Economics 2022 Slot 1
Macro > Income & Employment
Medium
Which of the following is true about the aggregate demand curve in the short run; Choose the correct option:
Correct Answer
Option 3
Correct Answer
Q214:
CUET Economics 2022 Slot 1
Macro > Income & Employment
Easy
The size of investment multiplier (k) depends on:-
Correct Answer
Option 3
Correct Answer
Q215:
CUET Economics 2022 Slot 1
Macro > Income & Employment
Medium
Identify the fiscal measures from the following that will help correct excess demand A. Decrease in Repo rate. B. Increase in taxes. C. Decrease in government expenditure. D. Increase in Repo rate E. Decrease in taxes Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q216:
CUET Economics 2022 Slot 1
Macro > Income & Employment
Medium
Assume that in an economy increased consumption is equal to increased saving, how many times will the national income increase in such an economy with an increase in investment?
Correct Answer
Option 1
Correct Answer
Q217:
CUET Economics 2022 Slot 1
Macro > Income & Employment
Easy
If the equilibrium level of output is less than the full employment level, then it is a situation of:
Correct Answer
Option 2
Correct Answer
Q218:
CUET Economics 2022 Slot 1
Macro > Income & Employment
Medium
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____
Correct Answer
Option 3
Correct Answer
Q219:
CUET Economics 2022 Slot 1
Macro > Income & Employment
Easy
Marginal propensity to save in zero when.
Correct Answer
Option 4
Correct Answer