CUET 2025 Economics Determination of Income and Employment MCQ Question Answers

1. The algebraic Relationship Between Multiplier and MPC Is –

2. The major economic activities of the government that affect the aggregate demand for final goods and services can be summarized by the _______&_________.

3. Even if income is zero, some consumption still takes place. Since this level of consumption is independent of income, it is called _______ consumption.

4. The inventory investment can take place due to

5. _______ are the unsold goods, unused raw materials or semi-finished goods which a firm carries from a year to the next

6. The Marginal Propensity to Save (MPS) is defined as the rate of change in ______ as income increases.

7. When Planned Savings is less than planned Investment, then: _______

8. The index for wholesale prices is called Wholesale Price Index (WPI). In countries like USA, it is referred to as _________

9. Paradox of Thrift Means If all the people of the economy increase the proportion of income they save the total value of savings in the economy will

10. The most important determinant off consumption demand is __________

11. A consumption function describes the relation between ­­­­________& ________.

12. Marginal Propensity to Consume is the change in consumption per unit change in_______.

13. ‘Investment goods’ (such as machines) are also part of the final goods – they are not intermediate goods like raw materials.

14. If MPC is 0.6, Then the investment Multiplier will be

15. The marginal propensity to consume may be explained as a rate of change of consumption as income changes.

16. When a Country does not have any income, its citizens still consume Rs. 100 worth of goods. Country’s autonomous consumption is 100. Its marginal propensity to consume is 0.8. This means that if income goes up by Rs. 100 then consumption will go up by________

17. aggregate output is determined solely by the level of aggregate demand. This is known as________.

18. If the demand is more than the level of output produced at full employment level. This situation is called the situation of excess _________. It leads to rise in prices in the __________

19. A = __ +__ is the total autonomous expenditure in the economy.

20. The concept that the aggregate value of goods and services produced in an economy is going around in a circular way. Either as factor payments, or as expenditures on goods and services, or as the value of aggregate production is Called as _______________