Economic Growth and National Income CDS Questions

CDS Economy

Economic Growth and National Income MCQ Questions


13.
Which of the following is NOT a component of aggregate demand?
A.
Consumption
B.
Investment
C.
Savings
D.
Government spending
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ANSWER :
C. Savings
14.
The term 'Paradox of Thrift' refers to:
A.
Savings leading to increased income
B.
Savings reducing total savings
C.
Consumption reducing income
D.
Increased investments reducing consumption
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ANSWER :
B. Savings reducing total savings
15.
The equation Y = C + I represents:
A.
Ex post values
B.
Ex ante values
C.
Consumption only
D.
Investment only
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ANSWER :
B. Ex ante values
16.
The slope of the consumption function is represented by:
A.
Marginal propensity to consume
B.
Marginal propensity to save
C.
Average propensity to save
D.
Average propensity to consume
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ANSWER :
A. Marginal propensity to consume
17.
When MPC is 1, the multiplier value will be:
A.
1
B.
0
C.
Infinite
D.
Negative
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ANSWER :
C. Infinite
18.
The relationship between income and savings is described by:
A.
Investment function
B.
Consumption function
C.
Savings function
D.
Demand function
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ANSWER :
C. Savings function