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

Lower interest rates are likely to :

(a)

Decrease in consumption

(b)

increase cost of borrowing

(c)

Encourage saving

(d)

increase borrowing and spending

As income increases, consumption will______

(a)

fall

(b)

not change

(c)

fluctuate

(d)

increase

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

(a)

marginal propensity to invest

(b)

disposable income

(c)

marginal propensity to consume

(d)

average propensity to consume

Define Marginal Propensity to Save (MPS).

Define Multiplier.

Define Accelerator.

State the propositions of Keynes’s Psychological Law of Consumption

Differentiate autonomous and induced investment.

Mention the differences between accelerator and multiplier effect.

Illustrate the working of Multiplier.

What are the differences between MEC and MEI.