12th Economics Chapter 4 - Consumption and Investment Functions Book Back Answers

Samacheer Kalvi 12th Economics – Chapter 4: Consumption and Investment Functions Book Back Answers

Samacheer Kalvi 12th Standard New Economics Book Back 1 Mark and 2 Mark Questions with Answers PDF uploaded and available below. Tamil Nadu Class 12 New Syllabus Economics Chapter 4 – Consumption and Investment Functions Book Back Solutions available for English medium students. TN Samacheer Kalvi 12th Std Economics Book Portion consists of 12 chapters. Check chapter-wise and Full Class 12th Economics Book Back Answers/ Guide 2022 PDF format for free download. 12th Economics Chapter 4 – Consumption and Investment Functions Book Back Answers below:

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12th Economics – Chapter 4: Introduction to Consumption and Investment Functions Book Back Answers

1. The average propensity to consume is measured by
a) C/Y b) CxY c) Y/C d) C+Y

2. An increase in the marginal propensity to consume will:
a) Lead to consumption function becoming steeper b) Shift the consumption function upwards
c) Shift the consumption function downwards d) Shift the savings function upwards

3. If the Keynesian consumption function is C=10+0.8 Y then, if the disposable income is Rs 1000, what is the amount of total consumption?
a) Rs 0.8 b) Rs 800 c) Rs 810 d) Rs 0.81

4. If the Keynesian consumption function is C=10+0.8Y then, when disposable income is Rs 100, what is the marginal propensity to consume?
a) Rs 0.8 b) Rs 800 c) Rs 810 d) Rs 0.81

5. If the Keynesian consumption function is C=10+0.8 Y then, and disposable income is Rs 100, what is the average propensity to consume?
a) Rs 0.8 b)Rs 800 c) Rs 810 d) Rs 0.9

6. As national income increases
a) The APC falls and gets nearer in value to the MPC. b) The APC increases and diverges in value from the MPC.
c) The APC stays constant d) The APC always approaches infinity.

7. As increase in consumption at any given level of income is likely to lead
a) Higher aggregate demand b) An increase in exports c)A fall in taxation revenue d) A decrease in import spending

8. Lower interest rates are likely to :
a) Decrease in consumption b) increase cost of borrowing c) Encourage saving d) increase borrowing and spending.

9. The MPC is equal to :
a) Total spending / total consumption b) Total consumption/total income
c) Change in consumption /change in income d) None of the above.

10. The relationship between total spending on consumption and the total income is the __________.
a) Consumption function b) Savings function c) Investment function d) aggregate demand function

11. The sum of the MPC and MPS is _______
a)1 b) 2 c) 0.1 d) 1.1

12. As income increases, consumption will _________
a)fall b) not change c) fluctuate d) increase

13. When investment is assumed autonomous the slope of the AD schedule is determined by the _____
a) marginal propensity to invest b) disposable income c) marginal propensity to consume d) average propensity to consume

14. The multiplier tells us how much __________ changes after a shift in _____
a) Consumption , income b) investment, output c) savings, investment d) output, aggregate demand

15. The multiplier is calculated as
a) 1/(1-MPC) b) 1/MPS c) 1/MPC d) a and b

16. It the MPC is 0.5, the multiplier is ____________
a) 2 b)1/2 c) 0.2 d) 20

17. In an open economy import _________ the value of the multiplier
a) Reduces b) increase c) does not change d) changes

18. According to Keynes, investment is a function of the MEC and _____
a) Demand b) Supply c) Income d) Rate of interest

19. The term super multiplier was first used by
a) J.R.Hicks b) R.G.D. Allen c) Kahn d) Keyne

20. The term MEC was introduced by
a) Adam Smith b) J.M. Keynes c) Ricardo d) Malthus

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11 Mar 2022