Consumption Savings and Investment MCQs | Macroeconomics

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Total spending made by the household sector at a given level of income is called consumption. Whereas, the functional relationship between savings
Consumption savings and investment MCQS

Consumption Savings and Investment MCQs

Total spending made by the household sector at a given level of income is called consumption. Whereas, the functional relationship between savings and the level of income is the savings function. Here on MCQs.club we have prepared Multiple Choice Questions (MCQs) on Consumption Savings and Investment that cover consumption savings and investment in macroeconomics MCQs, the relationship between them, the factors that determine consumption savings and investment. Moreover, there are MCQs on Marginal efficiency of capital (MEC) and types of Investments. Our MCQs are helpful for Competitive exams, Business management exams and Professional accountancy exams.

  1. Which of the following is true for “Consumption”?
    1. Total spending made by the household sector at a given level of income is called consumption.
    2. The functional relationship between consumption and level of income is the consumption function.
    3. Both A&B
    4. None
  1. Which of the following is true for “Savings”?
    1. The income remaining from the household sector after all consumption has taken place.
    2. The functional relationship between savings and the level of income is the savings function.
    3. Both A&B
    4. None
  1. Identify what is correct for Keynes’ Psychological Law –
    1. People increase their consumption as their income increases, but not by as much as their income increases.
    2. Aggregate consumption can increase due to increased aggregate income, but the increase in aggregate consumption will be less than the increase in income.
    3. What isn’t spent on consumption is saved.
    4. All of the above
  1. Determinants of the consumption function include:
      1. Real income
      2. Distribution of wealth
      3. Expectations of price changes
      4. Changes in Fiscal Policy
      5. Changes in Interest Rates
    1. All of the above
    2. (I) and (IV) only
    3. (II) (III) and (V) only
    4. None
  1. The proposed mathematical formula for Keynesian theory of consumption is:
    1. Y =a + bX
    2. C =a + bY
    3. C =a – bX
    4. None
  1. The extra consumption resulting from an increase in income is called___________.
    1. Induced consumption
    2. Real disposable income
    3. Autonomous spending
    4. None
  1. The consumption at a given level of income is made up of ____________ the amount of which depends on the marginal propensity to consume.
    1. Consumer spending plus the Induced spending
    2. Autonomous spending plus the Induced spending
    3. Real disposable income plus Autonomous spending
    4. None
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