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Test: Income Determination - 2


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20 Questions MCQ Test Indian Economy for UPSC CSE | Test: Income Determination - 2

Test: Income Determination - 2 for UPSC 2022 is part of Indian Economy for UPSC CSE preparation. The Test: Income Determination - 2 questions and answers have been prepared according to the UPSC exam syllabus.The Test: Income Determination - 2 MCQs are made for UPSC 2022 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Income Determination - 2 below.
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Test: Income Determination - 2 - Question 1

C= -c+b(Y) is a

Test: Income Determination - 2 - Question 2

What does the term ceteris paribus mean?

Test: Income Determination - 2 - Question 3

The level of equilibrium income is determined by

Test: Income Determination - 2 - Question 4

The level of equilibrium income is also determined by

Test: Income Determination - 2 - Question 5

Multiplier tells us what will be the

Test: Income Determination - 2 - Question 6

Autonomous consumption is assumed to be at

Test: Income Determination - 2 - Question 7

APC= 1-APS. It is

Detailed Solution for Test: Income Determination - 2 - Question 7

APC + APS = 1 because income is either used for consumption or for saving.

Test: Income Determination - 2 - Question 8

APS= 1+APC. It is

Test: Income Determination - 2 - Question 9

MPC+MPS should always be equal to

Detailed Solution for Test: Income Determination - 2 - Question 9

Mathematically, in a closed economy, MPS + MPC = 1

Test: Income Determination - 2 - Question 10

MPS = 1- MPC. It is

Detailed Solution for Test: Income Determination - 2 - Question 10

Since MPS is measured as ratio of change in savings to change in income, its value lies between 0 and 1. Also, marginal propensity to save is opposite of marginal propensity to consume. Mathematically, in a closed economy, MPS + MPC = 1, since an increase in one unit of income will be either consumed or saved.

Test: Income Determination - 2 - Question 11

The saving is negative at

Test: Income Determination - 2 - Question 12

The value of APS can be negative when

Detailed Solution for Test: Income Determination - 2 - Question 12

Between APS and MPS, the value of APS can be negative when consumption expenditure becomes higher than income.

Test: Income Determination - 2 - Question 13

The coefficient (1-b) measures the

Test: Income Determination - 2 - Question 14

If income is Rs 1000 and consumption expenditure is Rs 200, APS will be

Detailed Solution for Test: Income Determination - 2 - Question 14

The ratio of total saving to total income is called APS. 
APS =  800/1000
        = 0.8

Test: Income Determination - 2 - Question 15

If APC is 0.7 then APS will be

Test: Income Determination - 2 - Question 16

The important factor influencing the propensity to consume in an economy is

Test: Income Determination - 2 - Question 17

The important factor influencing the propensity to save in an economy is

Test: Income Determination - 2 - Question 18

The savings function derived from the consumption function c=-a+by is

Detailed Solution for Test: Income Determination - 2 - Question 18

The correct option is B.

The Consumption function is a+bY and not -a+bY

We know, Y=C+S

S= Y - C

S=Y-(a+bY)

S=Y-a-bY

S= -a+Y-bY

S= -a+(1-b)Y

Test: Income Determination - 2 - Question 19

The slope of the saving function gives the

Test: Income Determination - 2 - Question 20

The coefficient (1-b) is also known as

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