Practice Exam 2 Question 1) One among the following is not a characterestic of Keynesian consumption function: Answers Option 1 The aggregate real consumption consumption expenditure is a stable function of real income Option 2 The MPC must lie in between zero and one Option 3 The consumption is a function of rate of interest Option 4 MPC = 1 - MPS Feedback Wrong click Incorrect selection Well done ! Correct choice. Wrong click Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 2) If the value of MPC in an economy is unity, the value of MPS will be Answers Option 1 One Option 2 Zero Option 3 Infinity Option 4 Two Feedback Wrong click Wow ! Correct selection Incorrect selection Wrong click Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 3) If all the people of the economy increase the proportion of income they save, the aggregate savings in the economy will not increase. This phenomenon is known as Answers Option 1 Paradox of thrift Option 2 Paradox of prosperity Option 3 Leontif paradox Option 4 Giffen paradox Feedback Congrats ! Correct choice Wrong click Incorrect selection Wrong click Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 4) Among the following, choose the one which represent the multiplier: Answers Option 1 Option 2 Option 3 Option 4 Feedback Incorrect selection Well done ! Correct click Incorrect selection Wrong click Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 5) MPC = Answers Option 1 Option 2 Option 3 Option 4 Feedback Incorrect selection Wow ! Correct selection Wrong click Incorrect selection Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 6) Match the following A B 1) i MPS 2)Consumption when income is zero ii Multiplier 3) iii MPC 4) iv Autonomous consumption Answers Option 1 1)iii, 2)iv, 3)i, 4)ii Option 2 1)ii, 2)iii, 3)i, 4)iv Option 3 1)i, 2)iii, 3)iv, 4)ii Option 4 1)iv, 2)iii, 3)i, 4)ii Feedback Correct. You look smart ! Incorrect selection Wrong click Incorrect selection Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 7) MPC increases , equilibrium income will Answers Option 1 Increase Option 2 Decrease Option 3 remain same Option 4 None of these Feedback Congrats ! Correct option. Incorrect selection Wrong click Incorrect selection Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 8) In the given equation C = 100 + .8y, MPC is Answers Option 1 100 Option 2 100 + .8y Option 3 .8 Option 4 100.8y Feedback Wrong click Incorrect selection Wow ! Correct selection Incorrect selection Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 9) In the equation AD =Ᾱ+cY, if investment increases the aggregate demand curve will shift Answers Option 1 Parallally upwards Option 2 Parallally downwards Option 3 pivot upward Option 4 pivot downward Feedback Well done ! Correct choice Wrong click Incorrect selection Wrong click Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 10) In a two sector model, equilibrium income equals Answers Option 1 Option 2 Option 3 Option 4 None of these Feedback Wow ! Correct selection Incorrect selection Wrong click Incorrect selection Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback)
