Income Determination CBSE Questions & Answers

Income Determination

This is Economics Class 12 Income Determination CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
Autonomous consumption is assumed to be at
  • A
    Maximum level of Income
  • B
    Low level of Income
  • C
    Zero level of Income
    Correct
  • D
    High level of Income
2
APC= 1-APS. It is
  • A
    FALSE
  • B
    None of these
  • C
    Depends on their values
  • D
    1
    Correct
3
APS= 1+APC. It is
  • A
    None of these
  • B
    Depends on their values
  • C
    TRUE
  • D
    0
    Correct
4
MPC+MPS should always be equal to 1
  • A
    1
    Correct
  • B
    Depends on their values
  • C
    None of these
  • D
    FALSE
5
MPC= 1-MPS. It is
  • A
    1
    Correct
  • B
    None of these
  • C
    Depends on their values
  • D
    FALSE
6
The saving is negative at
  • A
    Maximum level of Income
  • B
    High level of Income
  • C
    Low level of Income
  • D
    Zero level of Income
    Correct
7
In S= -a+ (1-b) Y, -a represents
  • A
    The amount of dissavings done when there is zero level of income.
  • B
    The amount of savings done when there is zero level of income.
    Correct
  • C
    The amount of savings done when there is high level of income.
  • D
    The amount of dissavings done when there is high level of income.
8
The coefficient (1-b) measures the
  • A
    Slope of the consumption function
  • B
    Slope of the sales function
  • C
    Slope of the dissaving function
  • D
    Slope of the saving function
    Correct
9
If income is Rs 1000 and consumption expenditure is Rs 1200, APS will be
  • A
    0.3
  • B
    0.4
  • C
    0.2
    Correct
  • D
    -0.5
10
If APC is 0.7 then APS will be
  • A
    1
  • B
    0.4
  • C
    0.7
  • D
    0.3
    Correct
11
The important factor influencing the propensity to consume in an economy is
  • A
    The level of investment
  • B
    The level of consumption
  • C
    The level of income (Y)
    Correct
  • D
    The level of savings
12
The important factor influencing the propensity to save in an economy is
  • A
    The level of savings
  • B
    The level of income (Y)
    Correct
  • C
    The level of investment
  • D
    The level of consumption
13
The savings function derived from the consumption function c=-a+by is
  • A
    S=Y-(a+bY)
  • B
    S=Y+(a+bY)
  • C
    S= -a+(1-b)Y
    Correct
  • D
    S=Y-(a+b)Y
14
The slope of the saving function gives the
  • A
    The amount of savings done when there is high level of income.
  • B
    The amount of dissavings done when there is high level of income.
  • C
    Increase in savings per unit increase in the income.
    Correct
  • D
    The amount of dissavings done when there is zero level of income.
15
The coefficient (1-b) is also known as
  • A
    1-MPS
  • B
    K
  • C
    MPC
  • D
    MPS
    Correct