Income Determination Test

Result

Income Determination Test - 13

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Weekly Quiz Competition

Question 1
1 / -0

If MPC =0.75, then MPS will be

A
2.5

B
25.5

C
0.25

D
1

Solution

MPS=1-MPC

MPS= 1-0.75. (given)

=0.25
Question 2
1 / -0

What does the term ceteris paribus mean?

A
in reference to

B
with the view that

C
other things remaining equal

D
things are different

Solution

other things remaining equal
Question 3
1 / -0

The equation of saving function is

A
C = - a + by.

B
S = - a + (1 - b) Y

C
S = f (Y)

D
S = - a + (1 - b)
Question 4
1 / -0

If the initial increase in the investment is Rs 1000 and MPC=0.8, the multiplier will be

A
6

B
4

C
3

D
5

Solution

K=1/1-mpc

= 1/1-0.8

=1/0.2

=5
Question 5
1 / -0

In C = a + b (Y), ‘C’ denotes

A
Consumption expenditure

B
Capital expenditure

C
Central expenditure

D
Collateral expenditure

Solution

It is a linear consumption function where 'C' represents consumption expenditure.