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HOME ASSIGNMENT

Macroeconomics

Income determination and Multiplier.

Question Very short answer type questions Marks
No
1. Equilibrium level of income / output is established when 1
a. AD=AS.
b. S=I.
c. both a and b .
d. none of these.
2. At the equilibrium point when: C=100+0.5Y and I=200, 1
savings will be________.
3. Define effective demand. 1
4. When S > , level of income and employment tends to 1
shrink. (True / False)
5. In Keynesian theory, equilibrium GDP is discussed with 1
reference to___________ period. (Short / long)
6. When = 200 + 0.7 and I=5500, equilibrium level of 1
income is ___________________.
7. In determination of Equilibrium level of income in a two- 1
sector model by AD-AS approach, AD curve is
represented by________.
a. (C+S) curve
b. (C+I) curve
c. (S+I) curve
d. none

8. If MPS = 0.8, and increase in investment is 10,000, 1
national income will increase by: -
a. 50,000
b. 25000
c. 12,500
d. 100,000
9. What is full employment equilibrium? 1
10. _______ will be the value of multiplier when MPC = 0.8. 1
11. For what value of MPC multiplier is maximum? 1