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CA Foundation Determination of National Income — practice questions — page 2

Explore 45 free Determination of National Income questions in CA Foundation Business Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Determination of National Income questions and exercises with answers

Showing questions 31–45 of 45.

In what form do materials and energy leave the economy after use?Read the answer and worked solution →In macroeconomics, what does a multiplier measure?Read the answer and worked solution →If variable x rises by k units and this makes y rise by 3k units, the multiplier is:Read the answer and worked solution →Government spending rises by 100 and GDP rises by 150 with no change in tax rates. The spending multiplier is:Read the answer and worked solution →A 1 unit rise in the monetary base raises the broad money supply by 10 units. The money multiplier is:Read the answer and worked solution →Under fractional-reserve banking, when is new money created?Read the answer and worked solution →The usual Keynesian multiplier formulas measure the effect on which quantity only?Read the answer and worked solution →Paul Samuelson credited which economist for inspiring his 1939 multiplier-accelerator model?Read the answer and worked solution →In the open-economy multiplier formula, the symbol m stands for the propensity to:Read the answer and worked solution →A plot of a variable's response to a shock over time t, t+1, t+2 is called:Read the answer and worked solution →In which decade was the modern theory of the multiplier developed by Kahn, Keynes and others?Read the answer and worked solution →The consumption function describes the relationship between consumption and what?Read the answer and worked solution →Who introduced the consumption function into macroeconomics in 1936?Read the answer and worked solution →Which consumption theory is Milton Friedman's (1957)?Read the answer and worked solution →Which theory of consumption did Modigliani and Brumberg propose in 1954?Read the answer and worked solution →

Worked practice questions

In what form do materials and energy leave the economy after use?

  1. Low-entropy capital
  2. High-entropy waste
  3. Financial capital
  4. Government revenue
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Correct answer: B. High-entropy waste

Inputs such as oil and fish are turned into products and then leave the system as degraded, high-entropy waste.

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In macroeconomics, what does a multiplier measure?

  1. Size of a bank's cash reserves
  2. Response of one variable to another
  3. Rate of interest on bank loans
  4. Share of imports in total output
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Correct answer: B. Response of one variable to another

A multiplier is the factor of proportionality linking a change in an exogenous variable to the resulting change in an endogenous variable.

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If variable x rises by k units and this makes y rise by 3k units, the multiplier is:

  1. 1/3
  2. 6
  3. k
  4. 3
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Correct answer: D. 3

The change in y divided by the change in x is 3k divided by k, which is 3.

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