Bihar Board Class 12 (Commerce) Determination of Income and Employment — practice questions
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Practice Bihar Board Class 12 (Commerce) Determination of Income and Employment in the app →In macroeconomics, what do ex ante values of consumption describe?Which term denotes the actual values of consumption and investment measured in a year?In the simple Keynesian consumption function, consumption mainly depends on what?What is autonomous consumption?In C = C-bar + cY, which term is the induced component of consumption?The marginal propensity to consume is the ratio of what?What is the maximum value the marginal propensity to consume can take?MPC equal to zero means consumers do what as income changes?If C = 100 + 0.8Y, how much is consumed when income is zero?With C = 100 + 0.8Y, income rises by Rs 100. By how much does consumption rise?In the Keynesian model, how is savings defined?If the marginal propensity to consume is c, what is the marginal propensity to save?If the MPC of an economy is 0.7, what is its MPS?If MPS is 0.2, what is the MPC?Average propensity to consume is defined as what?Saving divided by income gives which measure?Which of these counts as investment in macroeconomics?Why are machines produced in a year counted as final goods?Which variable largely influences a firm's decision to buy a new machine?What happens to firms' investment as the interest rate rises?Easy availability of credit has what effect on investment?In the two-sector model without a government, what is ex ante aggregate demand?In the two-sector model, how is total autonomous expenditure A obtained?Which autonomous component fluctuates periodically over time?Autonomous consumption represents which level of consumption in an economy?When does ex ante supply of final goods equal ex ante demand?If planned output exceeds ex ante demand, what piles up in warehouses?What is a depletion of inventories called?Which inventory change arises when a firm deliberately keeps some stocks?Unplanned inventory investment arises when what happens?With a government that levies tax T, how is disposable income Yd written?Which pair are the fiscal variables treated as autonomous in this model?Why can the price level be treated as fixed in the first stage of analysis?With unused resources, which law does not apply as output expands?The income determination model is based on the theory of which economist?What does the assumption of ceteris paribus mean?Which two variables are held constant in the income model?In the Keynesian cross, where is equilibrium income found?In the Keynesian cross, what does the 45-degree line represent?Who first presented the Keynesian cross in a widely used economics book?The Keynesian cross formalises ideas from which work of Keynes?In Keynesian theory, at what employment level is equilibrium typically assumed to occur?In the simplest Keynesian cross, closed economy means net exports are what?Aggregate employment in the Keynesian cross is set by what?Given C = 40 + 0.8Y and I = 10, what is the equilibrium income?Autonomous expenditure rises by 10 and MPC is 0.8. By how much does income rise?What is the investment multiplier in terms of the MPC, c?What happens to the multiplier as the MPC becomes larger?What is the value of the multiplier when the MPC is 0.5?If the MPC is 0.9, by what factor does autonomous spending get multiplied?An economy has an MPS of 0.25. What is its autonomous expenditure multiplier?Autonomous spending is 200 and the MPC is 0.75. What is equilibrium income?A government raises spending by Rs 20 crore and MPC is 0.75. What is the rise in income?Autonomous spending rises by 10 and MPC is 0.8. What is round two's extra consumption?What drives aggregate demand up in the next multiplier round?After final output is sold, what is left over for the entrepreneur called?When autonomous expenditure A changes, how does the AD line move?When the MPC falls, what happens to the AD line?At the initial output, aggregate demand falls short of output. What emerges?What does the Paradox of Thrift state?If all people raise their MPS, total savings in the economy do what?With A = 50, MPC falls from 0.8 to 0.5. What is the new equilibrium income?With A = 50, MPC falling from 0.8 to 0.5 lowers equilibrium output by how much?What example cause of sudden thriftiness is given in the model?Why does the round-by-round fall in output stay finite?What is the full employment level of income?Does equilibrium (Y = AD) always imply full employment?Equilibrium output below the full employment level indicates which situation?What does deficient demand lead to in the long run?Excess demand in the economy leads to what in the long run?Under the effective demand principle, what determines aggregate output?The effective demand principle assumes aggregate supply is what at the fixed price?Equilibrium output also fixes which variable, given other factors of production?With A = 50, MPS = 0.2 and Y = 4000 crore, what is ex ante aggregate demand?How does government spending G affect aggregate demand?With a government, which term simply adds to the autonomous part of demand?