Tamil Nadu Board of Secondary EducationHSC Arts Class 12th
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Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Economics Answers Guide chapter 4 - Consumption and Investment Functions [Latest edition]

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Class 12th Economics Answers Guide - Shaalaa.com
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Chapter 4: Consumption and Investment Functions

Model Questions - Part AModel Questions - Part BModel Questions - Part CModel Questions - Part D
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Model Questions - Part A [Pages 72 - 74]

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Economics Answers Guide Chapter 4 Consumption and Investment FunctionsModel Questions - Part A [Pages 72 - 74]

Multiple Choice Questions

Model Questions - Part A | Q 1. | Page 72

The average propensity to consume is measured by ______.

  • C/Y

  • C×Y

  • Y/C

  • C+Y

Model Questions - Part A | Q 2. | Page 72

An increase in the marginal propensity to consume will:

  • Lead to consumption function becoming steeper

  • Shift the consumption function upwards

  • Shift the consumption function downwards

  • Shift savings function upwards

Model Questions - Part A | Q 3. | Page 72

If the Keynesian consumption function is C=10+0.8 Y then, if the disposable income is Rs 1000, what is the amount of total consumption?

  • ₹ 0.8

  • ₹ 800

  • ₹ 810

  • ₹ 0.81

Model Questions - Part A | Q 4. | Page 72

If the Keynesian consumption function is C=10+0.8Y then, when disposable income is Rs 100, what is the marginal propensity to consume?

  • ₹ 0.8

  • ₹ 800

  • ₹ 810

  • ₹ 0.81

Model Questions - Part A | Q 5. | Page 72

If the Keynesian consumption function is C=10+0.8 Y then, and disposable income is ₹100, what is the average propensity to consume?

  • ₹ 0.8

  • ₹ 800

  • ₹ 810

  • ₹ 0.9

Model Questions - Part A | Q 6. | Page 72

As national income increases______.

  • The APC falls and gets nearer in value to the MPC.

  • The APC increases and diverges in value from the MPC.

  • The APC stays constant

  • The APC always approaches infinity

Model Questions - Part A | Q 7. | Page 72

An increase in consumption at any given level of income is likely to lead to ______.

  • Higher aggregate demand

  • An increase in exports

  • A fall in taxation revenue

  • A decrease in import spending

Model Questions - Part A | Q 8. | Page 72

Lower interest rates are likely to :

  • Decrease in consumption

  • increase cost of borrowing

  • Encourage saving

  • increase borrowing and spending

Model Questions - Part A | Q 9. | Page 73

The MPC is equal to :

  • Total spending / total consumption

  • Total consumption/total income

  • Change in consumption /change in income

  • none of the above.

Model Questions - Part A | Q 10. | Page 73

The relationship between total spending on consumption and the total income is the _______.

  • Consumption function

  • Savings function

  • Investment function

  • aggregate demand function

Model Questions - Part A | Q 11. | Page 73

The sum of the MPC and MPS is _______.

  • 1

  • 2

  • 0.1

  • 1.1

Model Questions - Part A | Q 12. | Page 73

As income increases, consumption will _________.

  • fall

  • not change

  • fluctuate

  • increase

Model Questions - Part A | Q 13. | Page 73

When investment is assumed autonomous the slope of the AD schedule is determined by the _____.

  • marginal propensity to invest

  • disposable income

  • marginal propensity to consume

  • average propensity to consume

Model Questions - Part A | Q 14. | Page 73

The multiplier tells us how much _______changes after a shift in _____.

  • Consumption, income

  • investment, output

  • savings, investment

  • output, aggregate demand

Model Questions - Part A | Q 15. | Page 73

The multiplier is calculated as______.

  • 1/(1-MPC)

  • 1/MPS

  • 1/MPC

  • a and b

Model Questions - Part A | Q 16. | Page 73

It the MPC is 0.5, the multiplier is _________.

  • 2

  • 1/2

  • 0.2

  • 20

Model Questions - Part A | Q 17. | Page 73

In an open economy import _________ the value of the multiplier.

  • Reduces

  • increase

  • does not change

  • changes

Model Questions - Part A | Q 18. | Page 73

According to Keynes, investment is a function of the MEC and _____.

  • Demand

  • Supply

  • Income

  • Rate of interest

Model Questions - Part A | Q 19. | Page 74

The term super multiplier was first used by ______.

  • J.R.Hicks

  • R.G.D. Allen

  • Kahn

  • Keynes

Model Questions - Part A | Q 20. | Page 74

The term MEC was introduced by______.

  • Adam Smith

  • J.M. Keynes

  • Ricardo

  • Malthus

Model Questions - Part B [Page 74]

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Economics Answers Guide Chapter 4 Consumption and Investment FunctionsModel Questions - Part B [Page 74]

Answer the following questions in one or two sentences

Model Questions - Part B | Q 21. | Page 74

What is consumption function?

Model Questions - Part B | Q 22. | Page 74

What do you mean by propensity to consume?

Model Questions - Part B | Q 23. | Page 74

Define average propensity to consume (APC).

Model Questions - Part B | Q 24. | Page 74

Define marginal propensity to consume (MPC).

Model Questions - Part B | Q 25. | Page 74

What do you mean by a propensity to save?

Model Questions - Part B | Q 26. | Page 74

Define average propensity to save (APS).

Model Questions - Part B | Q 27. | Page 74

Define Marginal Propensity to Save (MPS).

Model Questions - Part B | Q 28. | Page 74

Define Multiplier.

Model Questions - Part B | Q 29. | Page 74

Define Accelerator.

Model Questions - Part C [Pages 74 - 75]

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Economics Answers Guide Chapter 4 Consumption and Investment FunctionsModel Questions - Part C [Pages 74 - 75]

Answer the following questions in one paragraph

Model Questions - Part C | Q 30. | Page 74

State the propositions of Keynes’s Psychological Law of Consumption.

Model Questions - Part C | Q 31. | Page 74

Differentiate autonomous and induced investment.

Model Questions - Part C | Q 32. | Page 74

Explain any three subjective and objective factors influencing the consumption function.

Model Questions - Part C | Q 33. | Page 74

Mention the differences between accelerator and multiplier effect.

Model Questions - Part C | Q 34. | Page 75

State the concept of the super multiplier.

Model Questions - Part C | Q 35. | Page 75

Specify the limitations of the multiplier.

Model Questions - Part D [Pages 35 - 75]

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Economics Answers Guide Chapter 4 Consumption and Investment FunctionsModel Questions - Part D [Pages 35 - 75]

Answer the following questions in a page

Model Questions - Part D | Q 36. | Page 75

Explain Keynes's psychological law of consumption function with a diagram.

Model Questions - Part D | Q 37. | Page 75

Briefly explain the subjective and objective factors of consumption function?

Model Questions - Part D | Q 38. | Page 75

Illustrate the working of Multiplier.

Model Questions - Part D | Q 39. | Page 35

Explain the operation of the Accelerator.

Model Questions - Part D | Q 40. | Page 75

What are the differences between MEC and MEI.

Chapter 4: Consumption and Investment Functions

Model Questions - Part AModel Questions - Part BModel Questions - Part CModel Questions - Part D
Class 12th Economics Answers Guide - Shaalaa.com

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Economics Answers Guide chapter 4 - Consumption and Investment Functions

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Economics Answers Guide chapter 4 (Consumption and Investment Functions) include all questions with solution and detail explanation. This will clear students doubts about any question and improve application skills while preparing for board exams. The detailed, step-by-step solutions will help you understand the concepts better and clear your confusions, if any. Shaalaa.com has the Tamil Nadu Board of Secondary Education Class 12th Economics Answers Guide solutions in a manner that help students grasp basic concepts better and faster.

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Concepts covered in Class 12th Economics Answers Guide chapter 4 Consumption and Investment Functions are Introduction to Consumption and Investment Functions, Consumption Function, Investment Function, Multiplier, The Accelerator Principle, Super Multiplier: (K and β Interaction).

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