The average propensity to consume is measured by _____.

(a)

C/Y

(b)

CxY

(c)

Y/C

(d)

C+Y

As increase in consumption at any given level of income is likely to lead

(a)

Higher aggregate demand

(b)

An increase in exports

(c)

A fall in taxation revenue

(d)

A decrease in import spending

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

(a)

Consumption function

(b)

Savings function

(c)

Investment function

(d)

aggregate demand function

If the Keynesian consumption function is C = 10 + 0.5Y then, and disposable income is 100, what is the average propensity to consume?

(a)

0.5

(b)

0.6

(c)

0.7

(d)

0.8

Decrease in consumption at any given level of income is likely to lead

(a)

Lower aggregate demand

(b)

An increase in exports

(c)

Higher aggregate demand

(d)

An increase in Investment

APC

(1)

Subjective and Objective

Determinants of consumption function

(2)

f(r)

I

(3)

Autonomous investment

Investment that is not dependent on the national income

(4)

Average propensity to consume

Induced Investment

(5)

Profit motive

Define Multiplier.

Define Accelerator.

When Y = 120, C = 120, calculate APC.

List out the assumption of psychological Law of Consumption.

What are the types of investment?

State the concept of super multiplier.

Specify the limitations of the multiplier.

When Y = 180, C = 170, find saving and APS.

Write the formula for APC, MPC, APS, MPS.

Draw the diagrams for Autonomous investment and induced investment.

Explain Keynes psychological law of consumption function with diagram.

Explain consumption function with the help of diagram.

Derive the value of the multiplier assuming the basic form of the consumption function as C = a + bY where "a" is autonomous consumption and "b" is the marginal propensity to consume. You may assume a two-sector economy.