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
The maximum value of investment multiplier can be
  • A
    200
  • B
    100
  • C
    101
  • D
    Infinity
    Correct
2
In c= -a + by
  • A
    ‘a’ is called intercept
    Correct
  • B
    ‘a’ is called interval
  • C
    ‘a’ is called extercept
  • D
    ‘a’ is called ultracept
3
The coefficient ‘b’ measures
  • A
    The slope of savings
  • B
    The slope of income
  • C
    The slope of investment
  • D
    The slope of consumption
    Correct
4
The slope, ‘b’ indicates
  • A
    The increase in investment per unit increase in income.
  • B
    The increase in consumption per unit increase in investment
  • C
    The increase in consumption per unit increase in income
    Correct
  • D
    The increase in Savings per unit increase in income
5
The slope, ‘b’ indicates
  • A
    MPS
  • B
    MPC
    Correct
  • C
    APS
  • D
    APC
6
The equation of propensity to consume is
  • A
    C=f(Y)
  • B
    S= -a+(1-b)
  • C
    S= -a+(1-b)Y
  • D
    C= -a+by.
    Correct
7
If the income is 1000 and the consumption is 1200, APC will be
  • A
    0.12
  • B
    1.1
  • C
    1.3
  • D
    1.2
    Correct
8
The APC can be equal to one when
  • A
    APS=1
  • B
    APS=2
  • C
    APS=-1
  • D
    APS =0
    Correct
9
When APS=1
  • A
    consumption = income
    Correct
  • B
    consumption = autonomous consumption
  • C
    consumption = savings
  • D
    consumption = investment
10
If y=1000, c=1000, the APC+APS will be
  • A
    1.0
    Correct
  • B
    3
  • C
    2
  • D
    4
11
If y=1000, c=1000, the 1-APC=APS=
  • A
    2
  • B
    0.0
    Correct
  • C
    1
  • D
    3
12
If the initial increase in the investment is Rs 1000 and MPC=0.8, there is a total increase in the income by
  • A
    Rs. 1000
  • B
    Rs. 5000
    Correct
  • C
    Rs. 6000
  • D
    Rs. 500
13
If the initial increase in the investment is Rs 1000 and MPC=0.8, the level of consumption expenditure will increase by
  • A
    3000
  • B
    4000.0
    Correct
  • C
    2000
  • D
    1000
14
If the initial increase in the investment is Rs 1000 and MPC=0.8, the level of savings will increase by
  • A
    1000.0
    Correct
  • B
    3000
  • C
    4000
  • D
    2000
15
The formula of investment multiplier in terms of MPS is
  • A
    \(\frac{{\Delta Y}}{{\Delta I}}\)
    Correct
  • B
    \(\frac{C}{Y}\)
  • C
    \(\frac{C}{{\Delta I}}\)
  • D
    \(\frac{{\Delta C}}{{\Delta D}}\)