Lower interest rates are likely to :

(a)

Decrease in consumption

(b)

increase cost of borrowing

(c)

Encourage saving

(d)

increase borrowing and 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

The multiplier tells us how much __________ changes after a shift in _____

(a)

Consumption, income

(b)

investment, output

(c)

savings, investment

(d)

output, aggregate demand

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

If the MPC = 0.6, find MPS

(a)

1

(b)

0.4

(c)

0.6

(d)

2

Define average propensity to save (APS).

Define Multiplier.

What do you mean by investment?

What is leakages of multiplier?

What is saving?

State the propositions of Keynes’s Psychological Law of Consumption

Differentiate autonomous and induced investment.

State the concept of super multiplier.

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

Draw the diagrams for Autonomous investment and induced investment.

Briefly explain the subjective and objective factors of consumption function?

What are the differences between MEC and MEI.

What are the determinants of investment function?

What are the factors on which MEC depends? Also give details on the factors which influence MEC.