Micro Economics MCQ (GK Set-1) with Answers

An increase in autonomous consumption will shift W downwards

An increase in induced consumption would make the W line flatter

An increase in injections will shift the J line upwards

If either line shifts upwards, the equilibrium level of output will increase

I

G

M

X

An increase in exports

An increase in the fraction of their income which people spend on imports

An increase in tax rates

An increase in thriftiness by households

The planned expenditure line will shift upwards, because people will pay more in the shops on tobacco products

The planned expenditure line will shift downwards, because people will buy fewer cigarettes, so their spending on tobacco after allowing for the tax will be lower

The withdrawals line will end up shifting downwards, because the rise in the tax will cause people to save less

The injections line will shift downwards, because this includes all government spending net of taxes

The multiplier in a four-sector economy equals 1/(1-MPEY)

The multiplier in a four sector economy equals 1/(MPSY)

The size of the multiplier increases if the W line becomes flatter

The balanced budget multiplier means that if the government increases its taxes and purchases by the same amount, output might still increase