Income Determination Test

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Income Determination Test - 15

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Weekly Quiz Competition

Question 1
1 / -0

Increase in government expenditure would lead to increase in

A
None.

B
Both.

C
AD.

D
AS.

Solution

Because , AD=C+I+G+(X-M). So, clearly AD is a function of G.
Question 2
1 / -0

The coefficient ‘b’ measures

A
The slope of savings

B
The slope of consumption

C
The slope of investment

D
The slope of income

Solution

'b' measures rate of change of consumption with respect to change in income.
Question 3
1 / -0

The "planned" value of the variables like consumption, investment, output, etc, is known as:

A
ex pre measures

B
none of these

C
ex post measures

D
ex ante measures
Question 4
1 / -0

The equation of propensity to consume is

A
S = - a + (1 - b)

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

C
C = f(Y)

D
C = a + by

Solution

Propensity to consume in economics means the tendency of consumers to spend income. Since, tendency is either of autonomous consumption or induced consumption, denoted by 'a' and 'bY' respectively
Question 5
1 / -0

If the income is 1000 and the consumption is 1200, APC will be

A
0.12

B
1.2

C
1.1

D
1.3

Solution

APC=C/Y=1200/1000=1.2
Question 6
1 / -0

The APC can be equal to one when

A
APS = -1

B
APS=2

C
APS=1

D
APS =0

Solution

APS=0 , implies that all income is consumed

Thus, APC=Y/Y=1

As , Y=C.(all income is consumed
Question 7
1 / -0

When APS=1

A
Savings= income.

B
consumption = autonomous consumption

C
consumption = investment

D
consumption = savings

Solution

Given, APS=1

But, APS=S/Y

So, S/Y=1

S=Y.
Question 8
1 / -0

If y=1000, c=1000, the APC+APS will be

A
1.0

B
2

C
4

D
3

Solution

Since , APC=C/Y=1000/1000=1

Thus, APS=1-APC=1-1=0.

Now, APC+APS=1+0=1.

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Re-Attempt Weekly Quiz Competition

Income Determination Test - 15

Result

Income Determination Test - 15

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Rank

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SHARING IS CARING

Question 1

None.

Both.

AD.

AS.

Solution

Question 2

The slope of savings

The slope of consumption

The slope of investment

The slope of income

Solution

Question 3

ex pre measures

none of these

ex post measures

ex ante measures

Question 4

S = - a + (1 - b)

S = - a + (1 - b) Y

C = f(Y)

C = a + by

Solution

Question 5

0.12

1.2

1.1

1.3

Solution

Question 6

APS = -1

APS=2

APS=1

APS =0

Solution

Question 7

Savings= income.

consumption = autonomous consumption

consumption = investment

consumption = savings

Solution

Question 8

1.0

2

4

3

Solution

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