Income Determination Test

Result

Income Determination Test - 14

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Weekly Quiz Competition

Question 1
1 / -0

In C = a + b (Y), ‘a’ denotes

A
Automatic consumption expenditure

B
Autonomous consumption expenditure

C
Consumption expenditure

D
Annual consumption expenditure

Solution

Here, 'a' is a constant which denotes autonomous consumption.This consumption is not induced by income changes.
Question 2
1 / -0

In C = a+ b (Y), ‘b’ denotes

A
1 - MPC

B
MPC

C
1 + MPC

D
MPS

Solution

'bY 'denotes induced consumption where 'b' denotes marginal propensity to consume.
Question 3
1 / -0

In C = a+ b (Y), ‘Y’ denotes

A
GNP

B
NNP

C
NDP

D
Disposable income

Solution

'bY' denotes induced consumption where 'Y' denotes disposable income as consumption is not determined by taxes.
Question 4
1 / -0

In S = - a + (1 - b) Y ‘S’ denotes

A
Level of savings and Capital expenditure

B
Level of subsidies

C
Level of sales

D
Level of savings

Solution

The given function is an algebraic linear function of savings where S denotes level of savings, having two parts :autonomous savings and induced savings.
Question 5
1 / -0

In S = - a + (1 - b) Y, ‘a’ denotes

A
Consumption expenditure

B
Annual consumption expenditure

C
Automatic consumption expenditure

D
Autonomous savings.

Solution

'a' is constant which implies that this saving takes place even when income is zero and is independent of the level of income.So, 'a' denotes autonomous savings.
Question 6
1 / -0

In S = - a + (1 - b) Y ‘1-b’ denotes

A
MPC

B
Multiplier

C
MPS

D
Consumption

Solution

(1-b)Y denotes induced savings where (1-b) denotes MPS. MPS is a part of saving function whereas MPC is a part of consumption function.
Question 7
1 / -0

In S = - a + (1 - b) Y ‘b’ denotes

A
1+MPC

B
MPS

C
1-MPC

D
MPC

Solution

Since, MPS =1-b =1-MPC.

Hence, 'b' must be MPC.
Question 8
1 / -0

In S = - a + (1 - b)Y ‘Y’ denotes

A
GNP

B
NDP

C
NNP

D
Disposable income.

Solution

Because savings are started when first taxes are deducted from income.
Question 9
1 / -0

In S = - a + (1 - b)Y , ‘-a’ denotes

A
Negative Consumption

B
Negative income

C
Negative savings

D
Negative Investment expenditure

Solution

'-a' denotes autonomous savings.So, these are done at zero level of income.

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Re-Attempt Weekly Quiz Competition

Income Determination Test - 14

Result

Income Determination Test - 14

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SHARING IS CARING

Question 1

Automatic consumption expenditure

Autonomous consumption expenditure

Consumption expenditure

Annual consumption expenditure

Solution

Question 2

1 - MPC

MPC

1 + MPC

MPS

Solution

Question 3

GNP

NNP

NDP

Disposable income

Solution

Question 4

Level of savings and Capital expenditure

Level of subsidies

Level of sales

Level of savings

Solution

Question 5

Consumption expenditure

Annual consumption expenditure

Automatic consumption expenditure

Autonomous savings.

Solution

Question 6

MPC

Multiplier

MPS

Consumption

Solution

Question 7

1+MPC

MPS

1-MPC

MPC

Solution

Question 8

GNP

NDP

NNP

Disposable income.

Solution

Question 9

Negative Consumption

Negative income

Negative savings

Negative Investment expenditure

Solution

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