Free Printable Short run equilibrium

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Short run equilibrium

Total questions: 72

Worksheet time: 35mins

Name

Class

Date

What is the minimum and maximum value of the investment multiplier?

(separate the two answers by a comma or a semicolon)

0, 1

-1, 1

1, infinity

0, infinity

When the investment multiplier is 1, the value of MPC is (a) .

Write True or False :

Equilibrium GDP is struck when -

Actual Saving = Actual Investment

(a)

[SELECT ALL THAT APPLY]

Which are the approaches to equilibrium output

AS = AD

S = I

Ex Post Saving = Ex Post Investment

Y = AD

AS is

Perfectly Elastic

Perfectly Inelastic

Elastic

Inelastic

Investment multiplier =

$\frac{\Delta I}{\Delta Y}$

$\frac{\Delta Y}{\Delta I}$

$\frac{\Delta C}{\Delta I}$

$\frac{Y}{I}$

MPC and multiplier have a ________ relationship

Direct

Indirect

Constant

None of the above

If AD<AS, then the remedy would be -

Firms would decrease employment

Underemployed resources would be properly utilized

Firms will spend more on investment

Government would increase taxes

If MPS = 0.1, calculate the value of investment multiplier

(a)

10.

MPC = 0.6

Calculate the value of the investment multiplier

(a)

11.

What happens to the level of national income, when aggregate supply exceeds aggregate demand?

Increases

Decreases

Remains constant

None of the above

12.

If MPC = MPS, what is the value of the investment multiplier?

13.

C = 50 + 0.5Y, where C is consumption expenditure, Y is national income. Investment expenditure is 72000.

Calculate equilibrium level of national income

(a)

14.

C = 100 + 0.75Y

I = 50

Find level of consumption at equilibrium

(a)

15.

True or False

Autonomous investment curve is a straight vertical line shooting from the x-axis.

(a)

16.

If ex ante investment means planned investment, ex post investment means (a)

17.

An increase in which of the following will decrease aggregate demand?

Consumer Wealth

Government Spending

Real Estate Interest

Net Exports

18.

MPC=

change in consumption/change in income

income/consumption

19.

Components of Aggregate demand are

Consumption(C) & Investment(I)

Consumtion(C) & saving(S)

20.

National income is determined where

AD=AS

AD+AS

21.

Autonomous consumption is equal to

Saving

Dissaving

22.

Y=C+=?

Saving(S)

Export(X)

23.

APC+APS=?

zero

24.

Investment multiplier=

change in income/change in investment

income/saving

25.

Relation between Multiplier and MPC=

Direct

Inverse

26.

To reduce infaltionary gap Bank rate should be

increased

Decreased

27.

Autonomous consumption is indicated by --- in the consumption function.

28.

What is the value of MPC when MPS is zero?

0.5

29.

Aggregate supply = Consumption

Supply

investment

saving

30.

There is a ---- relationship between MPS and investment multiplier.

positive

inverse

direct

31.

In case of excess demand, the RBI------ the bank rate or interest rate which makes the credit drear

increases

decreases

deposit

32.

When does a situation of deficient demand arise in an economy?

S<1

S>1

Ad>AS

AD<AS

33.

Inflationary gap

Excess Demand

Implicit Demand

Revenue policy

34.

What is the formula of APS?

$\Delta$ C/Y

S/Y

Y/S

35.

Ex-ante means --------

(a)

36.

----- is equal to the difference between AD beyond full employment and AD at full employment

(a)

37.

------ refers to selling of government approved securities to the public

(a)

38.

During excess demand, R.B.I will ------- Margin requirements

(a)

39.

CRR is a method of --------measures

(a)

40.

This diagram shows-------demand

(a)

41.

Net Exports = -----(formula)

(a)

42.

C+I gives me the value for --------

(a)

43.

AD=AS is a situation of -------output

(a)

44.

What does the angle SEI denote?

(a)

45.

Autonomous Consumption is __________________ related to the level of Income.

Totally

Inversely

Positively

Not

46.

In Determination of Equilibrium level of Income by AD-AS approach, AD is represented by:-

C + I

C + S

S + I

C + Y

47.

What is the Value of MPS if MPC is given as 0.85

0.25

0.35

0.15

0.85

48.

Slope of Consumption Function is called:

Autonomous Consumption

MPC

APC

APS

49.

What is the Value of Multiplier When S = -100 + 0.2 Y (SAVING FUNCTION)

0.5

1.5

5.0

4.0

50.

The GAP by which the Aggregate Demand has exceeded the the AD that is required for Full Employment Equilibrium, It is called as :-

Inflationary GAP

Deflationary GAP

Underemployment GAP

None of these

51.

The Maximum value of MPC can be:-

0.5

Infinity

52.

The Maximum value of MPC can be:-

0.5

Infinity

53.

Which of the following can be negative ?

APC

APS

MPC

MPS

54.

Consumption Function is the Functional Relation between

Income and saving

Price level and consumption

Income and consumption

ALL OF THE ABOVE

55.

When Income is Zero, Then saving will be

-ve

+ve

None of these

56.

Whose value can be greater than I ?

APC

MPC

MPS

NONE OF THESE

57.

Investment That changes with the change in income is called

Autonomous Investment

Induced Investment

Net Investment

Gross Investment

58.

At equilibrium level:

consumption = investment

saving = investment

aggregate demand = saving

consumption = saving

59.

If an investment of Rs. 10 crore results in an increase in income by Rs. 50 crore, then the value of multiplier will be:

60.

On account of injections and withdrawals, equilibrium level of income undergoes

a shift

no shift

a dispersal

no change

61.

If rhe value of MPC = 0.9 find the value of multiplier?

62.

If MPS = 1, calculate the value of K.

63.

If MPS = 1 and increase in national income = Rs. 500 crore, calculate the increase in investment.

500 cr

40 cr

10 cr

2 cr

64.

If MPC = 0.4, What will be change in saving when income increase by Rs. 100 ?

Rs. 60

Rs. 50

Rs. 40

Rs. 70

65.

Equilibrium level of income can be determined at:

full employment

under full employment

over full employment

all of these

66.

Multiplier is the ratio of change in income to a given change in

supply

demand

investment

capital stock

67.

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

0.25

NONE OF THESE

68.

If MPC = 0.6, THE INVESTMENT MULTIPLIER WILL BE:

1.67

2.5

69.

when the economy decides to save the whole of its additional income, then the value of investment multiplier will be:

inderminate

infinity

70.

if C = 20 + 0.80Y and investment expenditure is Rs. 50 cr, then equilibrium income is:

00cr

350 cr

200 cr

100 cr

71.

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

72.

S = -20 + 0.4Y and C = 20 + 0.6Y will yield the same investment multiplier.

True

False

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Short run equilibrium

Total questions: 72

Worksheet time: 35mins

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