Economics MCQs

Page No. 379

If the government increases spending and raises taxes by just enough to finance this increase it will ?


aleave output unchanged


bincrease output


c reduce output


d increase the MPC


View Answer increase output

If a result of households wish to save more there is a change in equilibrium income and no change in equilibrium saving this is an example of ?


a market imperfection


bthe law of diminishing returns


c the paradox of thrift


d market failure



The multiplier is calculated as___________?


a 1(1-MPC)


b 1/MPS


c1/MPC


da or b


View Answer a or b

When investment is assumed to autonomous the slope of the AD schedule is determined by the ?


amarginal propensity to invest


bdisposable incomes


cmarginal propensity to consume


d average propensity to consume



Short-run equilibrium output means that aggregate demand __________ actual output?


ais less than


bequals


c is greater than


d fluctuates around


View Answer equals

When we refer to the hidden economy we mean unrecorded income owing to ?


atax evasion


b poor statistics


cthe lags between statistical collection and publication


dsmuggling


View Answer tax evasion

Real GNP measures income ?


aincluding non-market activities


b adjusted for inflation


cincluding externalities


dincluding tax evasion



In the circular flow we would expect leakages to ___________ injections?


a. equal


b be less than


c be greater than


d. be less or greater than


View Answer . equal

Leakages from the circular flow are _________ and __________?


a investment, savings, government expenditure


b. savings, taxes net of subsidies imports


c consumption investment government expenditure


dconsumption taxes imports



In an economy measuring (1) total value added (2)total spending on final goods and (3)total factor earning gives the result that ?


a3>2>1


b 3=2=1


c 3<2<1


dany measure can be larger or smaller than any other


View Answer 3=2=1

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