WorksheetsIncome Determination and Multiplier
Total questions: 25
Worksheet time: 13mins
At equilibrium level:
consumption = investment
saving = investment
aggregate demand = saving
consumption = saving
If an investment of Rs. 10 crore results in an increase in income by Rs. 50 crore, then the value of multiplier will be:
5
4
2
10
On account of injections and withdrawals, equilibrium level of income undergoes
a shift
no shift
a dispersal
no change
If rhe value of MPC = 0.9 find the value of multiplier?
5
10
15
20
If MPS = 1, calculate the value of K.
1`
4
2
3
Relationship between MPC and multiplier is
direct
indirect
proportional
no relation
If MPS = 1 and increase in national income = Rs. 500 crore, calculate the increase in investment.
500 cr
40 cr
10 cr
2 cr
If MPC = 0.4, What will be change in saving when income increase by Rs. 100 ?
Rs. 60
Rs. 50
Rs. 40
Rs. 70
Equilibrium level of income can be determined at:
full employment
under full employment
over full employment
all of these
Multiplier is the ratio of change in income to a given change in
supply
demand
investment
capital stock
At higher level of MPC, the value of multiplier is
high
low
does not change
all of these
if MPC is greater than MPS the value of multiplier will be
greater than 2
less than 2
equal to 2
equal to 5
If an increase of Rs.10000 in investment in an economy results in an increase in income of Rs. 40000, what will be MPS?
0.4
4
0.25
NONE OF THESE
The maximum value of multiplier is ___________ when the value of MPC is ______ .
infinity, zero
infinity, one
one, infinity
none of these
when planned saving is less than planned investment, it indicate a situation when:
AD < AS
AD = AS
AD > AS
NONE OF THESE
If MPC = MPS, THEN VALUE OF MULTIPLIER IS:
Infinity
1
2
equal to MPC
If MPC = 0.6, THE INVESTMENT MULTIPLIER WILL BE:
1.67
2.5
6
4
when the economy decides to save the whole of its additional income, then the value of investment multiplier will be:
1
inderminate
0
infinity
if C = 20 + 0.80Y and investment expenditure is Rs. 50 cr, then equilibrium income is:
00cr
350 cr
200 cr
100 cr
If MPS = 0.30, Autonomous consumption = Rs. 50 crores and investment = Rs. 100 crores, then equilibrium income will be
500 cr
50cr
300 cr
45 cr
If aggregate demand exceed aggregate supply, the income rises.
True
False
Value of investment multiplier varies between zero and infinity.
True
False
S = -20 + 0.4Y and C = 20 + 0.6Y will yield the same investment multiplier.
True
False
There is an inverse relationship between the value of marginal propensity to save and investment multiplier.
True
False
According to Keynes, the equilibrium level of income is always is always determined corresponding to full employment level.
True
False
