Self Studies
Self Studies
Self Studies
Self Studies

Income Determination Test - 20

Result Self Studies

Income Determination Test - 20
  • Score

    -

    out of -
  • Rank

    -

    out of -
TIME Taken - -
Self Studies

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Self Studies Self Studies
Weekly Quiz Competition
  • Question 1
    1 / -0
    Aggregate demand function represents a ________ relationship between the level of output and employment and the aggregate demand price.
    Solution
    Aggregate demand function represents the relation between the level of out produced in an economy to the level of employment in the economy and aggregate demand price where the level of output and level of employment has a direct relationship due to which if one increases then the other one also increases and vice versa as employees directly contribute in the production of output and level of output and demand price have an inverse relationship as level of output increases in the economy then the aggregate demand price decreases due to demand deficiency and vice versa.
  • Question 2
    1 / -0
    Break-even point is achieved when: 
    Solution

    Break even point refers to the point where the income=consumption or savings= 0. It is the point where the consumption curve intersects the 45 degree line. 

  • Question 3
    1 / -0
     _______ refers to actual saving in an economy during a year. 
    Solution
    Ex-post savings refers to the actual savings made in the economy during the period of one year. This aspect of savings is considered in the Income determination analysis. 
  • Question 4
    1 / -0
    AD curve is a _________________.
    Solution
    Aggregate Demand refers to the desired level of expenditure in the economy during an accounting year. It is what people wish to spend on the purchase of goods and services during an accounting year. 
    AD curve is upward sloping owing to increasing income in the economy as the income increases, the expenditure by the people also increases which leads to rising AD. Therefore, income and AD has a positive relationship between them. 
  • Question 5
    1 / -0
    Tick the wrong option _________________.
    Solution
    APC refers to Average Propensity to Consume which defines the amount of consumption in every 1 rupee of income for all level of income which can never be negative because consumption is never negative owing to the very existence of life and basic needs to satisfy it. 
  • Question 6
    1 / -0
    Consumption function is the functional relationship between ______ and  ______.
    Solution
    Consumption function refers to the standard equation of consumption which defines the relationship between consumption and income where consumption value can be derived at each level with the use of income value. 
    C= c+ bY where c=autonomous consumption, b= marginal propensity to consume, and Y= income. 
  • Question 7
    1 / -0
    If investment falls to zero, national income does not fall to zero because of _________________.
    Solution

    1.      Autonomous consumption refers to that consumption which occurs when there is no income in the economy. It is the minimum level of consumption that takes place in the economy. 

  • Question 8
    1 / -0
    Which of the following can have a negative value?
    Solution
    APS refers to Average Propensity to save which defines the amount of savings in every 1 rupee of income for all level of income which can never be more than one as savings can be negative in situations when consumption is more than the national income leading to dis-savings in the economy i.e. before the break even point when APS<0.
  • Question 9
    1 / -0
    The value of _____ can never be negative, while can have a value equal to one. 
    Solution
    APC refers to Average Propensity to Consume which defines the amount of consumption in every 1 rupee of income for all level of income which can never be negative because consumption is never negative owing to the very existence of life and basic needs to satisfy it while it can be more than one as long as consumption is more national income, i.e. before the break-even point, APC > 1. 

    Marginal Propensity to save refers to the percentage change in savings for every one rupee of change in the income. It is the ratio between the change in income and its corresponding change in savings. It can never be negative as it is a change in the value when the value of income changes while it can be equal to one if the overall change in the value of income is used in savings. 

  • Question 10
    1 / -0
     Break-even point in the following diagram is represented by: 

    Solution

    Break even point refers to the point where the income=consumption or savings= 0. Therefore, break even point in the following diagram is point B.

Self Studies
User
Question Analysis

  • Correct -

  • Wrong -

  • Skipped -

My Perfomance
  • Score

    -

    out of -
  • Rank

    -

    out of -
Re-Attempt Weekly Quiz Competition
Self Studies Get latest Exam Updates
& Study Material Alerts!
No, Thanks
Self Studies
Click on Allow to receive notifications
Allow Notification
Self Studies
Self Studies Self Studies
To enable notifications follow this 2 steps:
  • First Click on Secure Icon Self Studies
  • Second click on the toggle icon
Allow Notification
Get latest Exam Updates & FREE Study Material Alerts!
Self Studies ×
Open Now