# MCQ Chapter 10 Determination of Income and Employment Class 12 Economics

Please refer to Determination of Income and Employment MCQ Questions Class 12 Economics below. These MCQ questions for Class 12 Economics with answers have been designed as per the latest NCERT, CBSE books, and syllabus issued for the current academic year. These objective questions for Determination of Income and Employment will help you to prepare for the exams and get more marks.

## Determination of Income and Employment MCQ Questions Class 12 Economics

Please see solved MCQ Questions for Determination of Income and Employment in Class 12 Economics. All questions and answers have been prepared by expert faculty of standard 12 based on the latest examination guidelines.

### MCQ Questions Class 12 Economics Determination of Income and Employment

Question. Maximum value of investment multiplier is————- when the value of MPc)———–
a) Ten, zero
b) infinity, one
c) infinity, zero
d) none of them

B

Question. Multiplier is —————— related to the MPS.
a) Negatively
b) directly
c) not
d) rarely

A

Question. If saving function of an economy is S = -50 + 0.25 Y, then the value of MPC is——-
a) 0.25
b) 1.25
c) (-0.25)
d) 0.75

D

Question. If consumption expenditure is equal to the national income, then APS will be?
a) 1
b) o
c) (-1)
d) infinity

B

Question. The ratio of change in saving and change in Income is———————-
a) MPC
b) APC
c) MPS
d) APS

C

Question. When MPC is increasing in the economy, the rate of investment multiplier will———
a) Rise
b) Fall
c) Either rise or fall
d) Neither rise nor fall

A

Question. If the value of APC is greater than one, APS will be?
a) Negative
b) Zero
c) Greater than one
d) None

A

Question. Which of the followings value may be negative?
a) MPC
b) MPS
c) APS
d) APC

C

Question. When MPS value is 0.25 , the value of investment multiplier will be?
a) 1.33
b) 2
c) 5
d) 4

D

Question. In an economy investment increase by 100 Crores , and MPC is 0.57 , then National income will increase by———-
a) 500
b) 250
c) 570
d) 400

D

Question- If the value of APC is greater than one, APS will be?
(a) Negative
(b) Zero
(c) Greater than one
(d) None

A

Question- Multiplier is —————— related to the MPS.
(a) Negatively
(b) directly
(c) not
(d) rarely

A

Question- Maximum value of investment multiplier is————- when the value of MP(c)———–
(a) Ten, zero
(b) infinity, one
(c) infinity, zero
(d) none of them

B

Question- If consumption expenditure is equal to the national income, then APS will be?
(a) 1
(b) o
(c) (-1)
(d) infinity

B

Question-Which of the followings value may be negative?
(a)MPC
(b) MPS
(c) APS
(d) APC

C

Question- When MPC is increasing in the economy, the rate of investment multiplier will———
(a) Rise
(b) Fall
(c) Either rise or fall
(d) Neither rise nor fall

A

Question- In an economy investment increase by 100 Crores , and MPC is 0.57 , then National income will increase by———-
(a) 500
(b) 250
(c) 570
(d) 400

D

Question- When MPS value is 0.25 , the value of investment multiplier will be?
(a) 1.33
(b) 2
(c) 5
(d) 4

D

Question-If saving function of an economy is S = -50 + 0.25 Y, then the value of MPC is——-
(a) 0.25
(b) 1.25
(c) (-0.25)
(d) 0.75

D

Question- The ratio of change in saving and change in Income is———————-
(a) MPC
(b) APC
(c) MPS
(d) APS

C

Question. Which monetary measure may be adopted to correct Deficient Demand ?
a) Reduction in Bank Rate
b) Buying Securities in Open Markey
c) Reducing Cash Reserve Ratio
d) All the above

D

Question. Which factor affects Keynesian Multiplier ?
a) Marginal Propensity to Save
b) Marginal Propensity to Consumer
c) Both (a) and (b)
d) None of the above

C

Question. ‘The theory of employment multiplier was propounded by:
a) Keynes
b) Kahn
c) Hansen
d) Marshall

B

Question. Which of the following is a Read Investment?
c) Construction of Buildings
d) Opening Deposit Account in the Bank

C

Question. On which concept does classical viewpoint depend?
a) Say’s Law of Market
b) perfect Flexibility of Wage Rate
c) Perfect Flexibility of Interest Rate
d) All of these

D

Question. Which of the following statements about APC is incorrect:
a) APC can be greater and smaller than 1
b) APC can be equal to 1
c) APC can be zero
d) APC falls with increase in income

C

a) Horizontal straight line parallel to the X-axis
b) Positively sloped curve
c) Negatively sloped curve
d) Vertical straight line parallel to the Y-axis

B

Question. Which of these is a component of Aggregate Demand.
a) Private consumption expenditure
b) Investment expenditure
c) Savings
d) All of these

A.B

Question. If the value of Average Propensity to Consume (APC) is 0.8 and National Income is ₹4,000 crore, the value of savings will be _ .
a) ₹100 crores
b) ₹200 crores
c) ₹800 crores
d) ₹500 crores

C

Question. The value of _ can never be negative, while ___ can have a value eqaul to one.
a) MPS, APC
b) MPC, APS
c) APC, APS
d) APS, APC

A

Question. At the break-even point:
a) Consumption curve lies below the 45 degree line
b) Consumption curve intersects 45 degree line
c) Consumption curve lies above the 45 degree line
d) None of these

B

Question. Which of the following is true about AD in a two sector economy:
a) AD = Consumption + Investment
b) AD curve starts from some point above the origin
c) AD curve has a positive slope
d) All of these

D

Question. Which of the following is correct?
a) MPC + APC = 1
b) MPC + APS = 1
c) MPC + MPS = 1
d) MPC – MPS = 1

C

Question. the saving Function: S = -100 + 0.6Y, the value of autonomous consumption will be:
a) 0.6
b) -100
c) 0.4
d) 100

D

Question. According to the saving-investment viewpoint, income employment equilibrium will be determined at a point where:
a) S > I
b) S = I
c) I > S
d) None of these

B

Question. The classical theory is based on the assumption of:
a) Say’s the law of market
b) Flexibility in wage rates
c) Flexibility in interest rate
d) All of the above

D

Question. The value of Keynesian Investment Multiplier depends on:
a) Marginal Propensity to Consume
b) Marginal Productivity of Capital
c) Income Level
d) Investment Level

A

Question. Which one is the reason for appearing Deficit Demand condition?
a) Fall in the money supply in the country
b) Fall in investment demand as a result of rising in bank rate
c) Fall in disposable income and consumer demand due to increase in taxes
d) All the above

D

Question. In Keynesian economics, the state of Deficit Demand is called as:
a) Full Employment Equilibrium
b) Under Full Employment Equilibrium
c) Both (a) and (b)
d) None of the above

B

Read the following statement given below and choose the correct alternative

Question. Assertion (A)- The demand curve is a positively sloped straight line
Reason ( R)- Aggregate demand is Sum of investment and consumption
a) Both assertion and reason are true. Reason is the correct explanation of assertion
b) Both assertion and reason are true. Reason is not the correct explanation of assertion
c) Assertion is true but reason is not
d) Reason is true but Assertion is not

B

Question. Assertion (A): Consumption curve makes an intercept on the Y-axis, some point above the origin.
Reason (R): People need certain basic goods and services to sustain themselves, even if income is zero.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

A

Question. Assertion (A): Excess demand does not lead to any increase in the level of output.
Reason (R): Excess demand gives rise to an inflationary gap.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

B

Question. Assertion (A): There is a positive relationship between saving and income.
Reason (R): Savings are positive even at zero level of National Income.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True