Related InterviewSolutions

• Suppose income increases by 10 and the MPC is 0.8. Explain the multiplier mechanism with the help of a table.
• Give the meaning of Ex ante, Ex post, Ex ante consumption, and Ex ante investment.
• Explain the meaning of the break-even point. Illustrate the concept.
• From the following data, calculate 1. MPC 2. APC3. MPS 4. APSConsumption = 400, Income = 500, Change in income 600, Change in consumption = 450
• The Central Government sanctioned ₹40 crores to Kerala and Assam for making additional investments. The MPC of Kerala is 0.8 and Assam is 0.5.(a) Find the multiplier and multiplier effect on the income of these two States.(b) Explain the concept of output multiplier.
• State whether the following statements are true or false. If false, correct the statement. 1. Once the level of full employment is reached, the Keynesian AS curve becomes a downward sloping curve. 2. The rate of increase in exante consumption due to a unit increment in income is called marginal. 3. An increase in autonomous spending causes aggregate output of final goods to increase by a larger amount through the multiplier process.
• One among the following is not a characteristic of Keynesian consumption function. (a) The aggregate real consumption expenditure is a stable function of real income. (b) The mpc must lie in between zero and One(c) The consumption is a function of rate of interest (d) The mpc = 1 – mps
• In an economy, the equilibrium level of income is Rs 12000. The ratio of MPC to MPS is equal to 3:1. Calculate the additional investment required to reach a new equilibrium level of income of Rs 20000.
• Complete the following table:Income Consumption ExpenditureMPSAPC20001900300027004000340050004000
• An increase of Rs 250 in investment in an economy resulted in total increase in income of Rs 1000. Calculate the following: (a) MPC (Marginal propensity to consume) (b) ΔS(Change in Saving)