Economics Practice MCQ Page 45
Multiple Choice questions for Economics in the sets of 10 each on one page with questions and answers. All sets are useful in the preparation of subject tests for employment or admission.
Question: 3900 Increase in current income would cause the
- C and AE curves to shift upward
- C but not the AE curve to shift upward
- AE but not the C curve to shift upward
- C and AE curves to shift downward
- C and AE curve to remain unchanged
Question: 3901 Which of the following is not an equivalent statement of Keynesian equilibrium in the model without government?
- Aggregate expenditures equal output
- Unit tended investment is zero
- Unintended investment equals saving
- Desired investment equals saving
- Consumption equals income minus desired investment
Question: 3902 When taxes are introduced into the income/expenditure model; the
- AE and C curves shift upward by the amount of T
- AE and C curves shift downward by the amount of T
- AE and C curves shift downward by the amount of the MPC times T
- AE curve shift upward by the amount of T
- AE curve shifts downward by the amount of T
Question: 3909 The aggregate demand curve in the Keynesian model is
- vertical because of unemployment
- horizontal because of unemployment
- downward sloping because as any good becomes more expensive, people buy less of it
- downward sloping because as price rise real wealth falls, reducing consumption
- downward sloping because households spend less when inflation is high
Question: 3911 An increase in the foreign price level with the nominal exchange rate unchanged causes
- imports and exports to increase
- imports and exports to decrease
- no change in imports or exports
- imports to increase and exports to decrease
- exports to increase and imports to decrease
Question: 3913 Which of the following is an increase in autonomous expenditures?
- An increase in government spending
- An increase in taxes
- An increase in the marginal propensity to consume
- An increase in the marginal propensity to save
- An increase in imports
Question: 3917 In the income/ expenditure model,an increase in investment expenditures causes output to
- increase by less than the change in investment
- increase by the same amount as the change in investment
- increase by more than the change in investment
- decrease by less than the change in investment
- decrease by more than the change in investment
Question: 3918 If twenty cents out of each additional dollar of income is saved, then the simple expenditure multiplier is
- one
- two
- one-fifth
- five
- twenty
Question: 3920 If the marginal propensity to consume is 0.75 then, holding interest rates constant,a $ 1 billion increase in taxes will cause the Keynesian- equilibrium level output to
- increase by $4 billion
- increase by $3 billion
- decrease by $1 billion
- decrease by $3 billion
- decrease by $4 billion
Question: 3922 According to the autonomous-expenditure multiplier in the income / expenditure model,an increase in government spending increases output by
- more than an equal increase in investment
- the same amount as an equal increase in investment
- less than an equal increase in investment
- less than an equal reduction in taxes
- the same amount as an equal reduction in taxes
Question: 3924 If investment increases, then the equilibrium amount of saving
- decrease
- stays the same
- increases by less than investment increases
- increases by the same amount as investment
- increases by more than investment increases
Question: 3927 In general,crowding out causes the effect of an increase in government expenditures on output to
- be larger
- be smaller
- be one
- be zero
- not change
Answers to the questions of Economics on this page
Following list gives the correct choice for the answer of the Economics mcqs.
3900 . E
3901 . C
3902 . C
3909 . D
3911 . E
3913 . A
3917 . C
3918 . D
3920 . D
3922 . B
3924 . D
3927 . B
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