Macroeconomics: Income Determination - MCQs with answers

Macroeconomics: Income Determination - MCQs with answers

1) What does the term ceteris paribus mean?

a) things are different
b) other things remaining equal
c) with the view that
d) in reference to

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2) The "planned" value of the variables like consumption, investment, output, etc, is known as:

a) ex post measures
b) ex ante measures
c) ex pre measures
d) none of the above

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3) The "actual" value of the variables like consumption, investment, output, etc, is known as:

a) ex post measures
b) ex ante measures
c) ex pre measures
d) none of the above

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4) What is "mps" or the 'marginal propensity to save'?

a) the proportion of total additional planned savings to total additional income
b) the proportion of total additional income to total additional planned savings
c) the fraction of total additional income that is used for consumption
d) none of the above

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5) What is "mpc" or the 'marginal propensity to consume'?

a) the proportion of total additional planned savings to total additional income
b) the proportion of total additional income to total additional planned savings
c) the fraction of total additional income that is used for consumption
d) none of the above

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6) According to the effective demand principle:

a) at a certain price, the output shall not be determined by any known factor
b) at a certain price, the output will remain unaffected by rise or fall in demand
c) at a certain price, equilibrium output will be solely determined by the aggregate demand
d) none of the above

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7) According to the Paradox of Thrift:

a) as people become more thrifty they end up saving more
b) as people become more thrifty they end up saving less or same
c) as people become more thrifty their saving remains unaffected by their thriftiness
d) none of the above

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