# Determination of Income and Employment MCQ Questions for Class 12 Economics Chapter 4 with Answers

We have compiled the NCERT/CBSE chapter-wise Multiple Choice Class 12 Economics Chapter 4 Determination of Income and Employment with Answers by expert subject teacher for latest syllabus and examination. Prepare effectively for the exam taking the help of the Class 12 Economics Objective Questions PDF free of cost from here. Students also can take a free test of the Multiple Choice Questions of Determination of Income and Employment. Each question has four options followed by the right answer. Download the Economics Quiz Questions with Answers for Class 12 Pdf and prepare to help students understand the concept very well.

Question1.

## If MPC is equal to 1, the value of the multiplier is

(i) 0
(ii) 1
(iii) Between 0 and 1
(iv) Infinity

(iv) Infinity

Question2.

## What is the cause of Keynesian perfectly elastic Aggregate Supply curve?

(i) Wage price rigidity
(ii) Constant Marginal Product of Labour
(iii) Both of these
(iv) None of these

(iii) Both of these

Question3.

(i) 1.33
(ii) 2
(iii) 5
(iv) 4

(iv) 4

Question4.

## Consumption function is a functional relationship between:

(i) Income and saving
(iv) Price and consumption
(iii) Income and consumption
d) Income, consumption and saving

(iii) Income and consumption

Question5.

## If MPC is zero, the value of the multiplier is

(i) 0
(ii) 1
(iii) between 0 and 1
(iv) infinity

(ii) 1

Question6.

(i) One
(ii) Zero
(iii) Two
(iv) Infinite

(i) One

Question7.

(i) Negatively
(ii) directly
(iii) not
(iv) rarely

(i) Negatively

Question8.

(i) Rs. 60
(iv) Rs. 50
(iii) Rs. 40
d) Rs. 70

(iv) Rs. 50

Question9.

## According to classical economists, there always exists an equilibrium in the economy.

(i) Full employment
(ii) Underemployment
(iii) Over full employment
(iv) None of these

(i) Full employment

Question10.

## What is a fiscal measure of correcting deficient demand?

(i) Increase in public expenditure and decrease in taxes
(ii) Decrease in public debt
(iii) Deficit financing
(iv) All of these

(iv) All of these

Question11.

(i) 1
(ii) o
(iii) (-1)
(iv) infinity

(ii) o

Question12.

(i) Rs. 60
(iv) Rs. 50
(iii) Rs. 40
d) Rs.70

(i) Rs. 60

Question13.

(i) One
(ii) Zero
(iii) Two
(iv) Infinite

(i) One

Question14.

## Which is the measure of correcting excess demand?

(i) Deficit financing
(ii) Reduction in taxes
(iii) Increase in public expenditure
(iv) Increase in public debt

(iv) Increase in public debt

Question15.

## When MPC is increasing in the economy, the rate of investment multiplier will———

(i) Rise
(ii) Fall
(iii) Either rise or fall
(iv) Neither rise nor fall

(i) Rise

Question16.

## On account of injections and withdrawals, equilibrium level of income undergoes :

(i) A shift
(iv) No shift
(iii) A dispersal
d) No change

(iv) A shift

Question17.

(i) 0.67
(ii) 0.63
(iii) 0.60
(iv) 0.58

(ii) 0.63

Question18.

## Which among is the direct tax?

(i) Income tax
(iii) Wealth tax
(iv) All of these

(iv) All of these

Question19.

(i) 500
(ii) 250
(iii) 570
(iv) 400

(iv) 400

Question20.

(i) ∆Y/∆S
(iv) ∆Y/∆I
(iii) ∆I/∆Y
d) ∆Y/∆C

(iv) ∆Y/∆I

Question21.

(i) J.B.Say
(ii) J.S.Mill
(iii) Keynes
(iv) Ricardo

(i) J.B.Say

Question22.

## Which of the following is a Read Investment?

(iii) Construction of Buildings
(iv) Opening Deposit Account in the Bank

(iii) Construction of Buildings

Question23.

## Wage cut maintains full employment in the economy.” Who put forward this view?

(i) Pigou
(ii) Keynes
(iii) Marshall
(iv) None of the above

(i) Pigou

Question24.

## An increase in aggregate demand of equilibrium level of income and employment causes an increase in:

(i) Employment
(ii) Production
(iii) Income
(iv) All of these

(iv) All of these

Question25.

## Keynesian multiplier establishes a relationship between:

(i) Investment and Income
(ii) Income and Consumption
(iii) Saving and Investment
(iv) None of the above

(i) Investment and Income

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