As the MPS increases, the multiplier will:
Decrease
Increase
Either increase or decrease depending on the size of the change in investment
Remain constant
The central problem in Macro Economics is
Income and employment
Price and Output
Interest and Money
Unemployment
The Marginal Propensity to Consume
ΔS/ΔY
C/y . ΔP/ΔQ
ΔP/ΔQ
ΔC/ΔY
To explain the simple theory of income determination, Keynes used
Consumption and Investment
Aggregate demand and aggregate supply
Production and Expenditure
All the above
Aggregate demand is the total demand for all goods and services in an economy from
All sectors including the rest of the world
The household sector
The household and government sectors
The aggregate demand curve shift to the left when
The price level increases
Taxes are increased
All of the above
The consumption function relates the consumption expenditure decisions of households to
Investment decisions of firms
The level of disposable income
Saving decisions of households
The nominal interest rate
The most important determinant of consumption and saving is the:
Level of bank credit
Level of income
Interest rate
Price level
The Keynesian analysis of aggregate demand indicates that changes in the money supply
Have no effect on aggregate demand
Shift the aggregate demand curve in the opposite direction of the change in government spending
Shift the aggregate demand curve in the same direction as the change in government spending
Move the economy along the aggregate demand curve rather than shifting it
The marginal propensity of expenditure
The average propensity to consume
The marginal propensity to save
The marginal propensity to consume
