Free Printable Keynesian Investment Multiplier

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Keynesian Investment Multiplier

Total questions: 25

Worksheet time: 14mins

Name

Class

Date

The value of the multiplier will increase if

autonomous investment increases.

induced investment increases.

the MPC decreases.

the MPS decreases.

If the value of the investment multiplier is 5, an autonomous increase in

income of $10 will result in investment increasing by $50.

investment of $10 will result in income increasing by $60.

investment of $10 will result in consumption increasing by $40.

consumption of $10 will result in investment increasing by $40.

If there is an initial injection (e.g. a rise in exports) into the economy then the final increase in aggregate demand and real GDP will be greater. This reflects

economic growth

the multiplier

keynesian economic policy

accelerator

The proportion of any change in income that is spent rather than saved

the multiplier

income determinants

marginal propensity to consume

macroeconomic equilibrium

the greater the leakages the smaller the multiplier effect

The multiplier is useful in determining:

the full employment rate

level of business inventories

rate of inflation

change in GDP resulting from a change in spending

The multiplier effect means that

consumption is usually several times as large as savings

a change in consumption can cause a larger change in investment

an increase in investment can change GDP by a larger amount

a decline in MPC can cause GDP to rise by a larger amount

The marginal propensity to consume refers to the

proportion of any change in income that is spent on consumption

levels of consumption as a proportion of total income

changes in consumption as a result of higher interest rates

additional consumption spending on imported goods

Keynesian Economics focuses on

long run

short run

both short run and long run

neither short run nor long run

10.

If there is an initial injection (e.g. a rise in exports) into the economy then the final increase in aggregate demand and real GDP will be greater. This reflects

economic growth

the multiplier

keynesian economic policy

accelerator

11.

The proportion of any change in income that is spent rather than saved

the multiplier

income determinants

marginal propensity to consume

macroeconomic equilibrium

12.

The equation for the multiplier is:

1/MPC

1/1+MPC

1/MPS

1/1-MPS

13.

The value of multiplier depends on

investment

income

Marginal Propensity to consume

Average Propensity to consume

14.

Who is the author of the book The general Theory of Employment and Money

Ricardo

J.M Keynes

J.B Ray

Adam Smith

15.

Value of Investment Multiplier directly related to MPC but inversely related with

APC

MPS

APS

NONE OF THESE

16.

If value of Investment Multiplier can be more then 5 if

MPC-MPS-0.5

MPC<=0.8

MPC>=0.8

MPS<0.2

17.

When Income is Zero, Then saving will be

-ve

+ve

None of these

18.

Whose value can be greater than I ?

APC

MPC

MPS

NONE OF THESE

19.

What will be the value of Multiplier if MPC=MPS ?

none of the these

20.

What is the relationship between Multiplier and MPC ?

POSITIVE

NEGATIVE

NOT RELATED

EQUAL MPC

21.

AD=

C+I

C x I

C + S

C/Y

22.

If consumption function is 100 + 0.8Y then What will be the MPS ?

100

-100

0.8

0.2

23.

Investment That changes with the change in income is called

Autonomous Investment

Induced Investment

Net Investment

Gross Investment

24.

If the MPC > MPS The value of Multiplier will be

greater than 2

Less than 2

Equal to 2

Equal to 5

25.

_________ is the number by which a change in autonomous real investment or autonomous real consumption is multiplied to get the change in equilibrium real GDP

Accelerator

Multiplier

MPS

MPC

100 %

Keynesian Investment Multiplier

Total questions: 25

Worksheet time: 14mins

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