WorksheetsThe goods market
Total questions: 30
Worksheet time: 15mins
Who propounded the fundamental psychological "law of consumption" which forms the basis of the consumption function ?
Adam Smith
Amartya
Sen
David Ricardo
J.M Keynes
Consumption function is C= 30+ 0.6 Y. What will be Marginal Propensity to save ( MPS ) ?
0.6
0.4
0.3
0.18
All the points which are right to the IS curve will represent?
Excess supply of goods
Excess demand for goods
A & B both
None of the above
When Income is zero, savings are _______ ?
Zero
Positive
Negative
None of the above
The volume of "AUTONOMOUS" Investment always remain ________?
Constant
Changing
Both
None of the above
In the case of wealthy people, MPS will be __________
MPS does not depend on Income
Low
High
None of the above
The Relationship between Average Propensity to Save (APS) & Average Propensity to Consume (APC) is given by - ?
APC + APS = 10
APC X APS = 1
APC + APS = 0
APC + APS = 1
IS curve shows that when income increases, the ______ ?
interest rates must rise to restore equilibrium in the asset market
interest rates must rise to restore equilibrium in the goods market
interest rate must fall to restore equilibrium in the goods market
interest rate must fall to restore equilibrium in the asset market.
Which of the following shows goods market equilibrium?
LM Curve
IS curve
AS curve
AD demand Curve
At the Break-Even Point ( BEP), Saving function line intersects
Consumption function
X-axis
Y- axis
None of these
The Amount of consumption expenditure when income is zero, autonomous consumption is C>0 when,
the amount of Consumption expenditure, when income is zero
amount of Consumption expenditure when income is less or equal to zero
the amount of Consumption expenditure when income is more than 1
All of the above
Induced Investment curve is _________?
Upward sloping
Downward sloping
Both
None of the above
What does 'b' in consumption function state?
Rate of change in Income
Rate of change in consumption
Both
None of the above
0 >MPC > 1 ?
True
False
Which Investment has a direct impact on the employment, generation, national income growth, etc ?
Financial
Planned
Unplanned
Real
Which of the following is the slope of IS curve?
Positive slope
Negative slope
Direct slope
None of the above
What is an "INVESTMENT"?
the legal tender that can be used to exchange goods, debt, or services.
knowledge concerned with the production, consumption, etc
wealth in the form of money or other assets.
Expenditure made on creation of new capital assets
Choose the correct alternative?
MPC is positive and more than unity
MPC is negative and more than unity
MPC is positive and less than unity
MPC is negative and less than unity
What is the equation of Consumption function?
C=C+by
C=c+bY
C=C+By
C=C+bY
Ratio between total consumption and total income at a given level of income is ________ ?
MPS
MPC
APS
None of the above
How many types of Investments are there?
Eight
Six
Ten
Two
When income increases MPC falls more rapidly than APC?
True
False
An expansionary fiscal policy, ________________.
Shift the LM curve to the right
Shift the LM curve to the left
Shift the IS curve to the right
shift the IS curve to the left
What does investment function tell us about?
the connection between shifts in the national income and the investment
Private demand depends upon R & MEI
Both
None of the above
As we move down along the IS curve,
Investment spending and savings both increases
Investment spending declines but savings increases
Investment and savings both declines
Investment spending increases but savings do not change
MPC is known as ?
Consumption curve
Propensity to consume
Slope of curve
Slope of consumption curve
BEP can be attained when _______ ?
consumption is equal to the level of income
consumption is greater than income
consumption is lesser than income
All of the above
When entire additional income is consumed then, ?
∆C >∆Y
∆C <∆Y
∆C = ∆Y
None of the above
In a consumption curve, when income rises, consumption rises in a
Greater proportion
Lesser proportion
Both A & B
None of the above
Choose the correct alternative ?
MPC lies between -1 and 1
MPC lies between -1 & 0
MPC lies between 0 & 1
None of the above
