As the MPS increases the multiplier will ?

Related Mcqs:

1. The marginal propensity to save (MPS) is ?

   A. the average amount of income that is saved
   B. the fraction of a change in income that is saved
   C. the ratio of saving to income
   D. the ratio of income to saving

2. Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?

   A. The aggregate supply curve shifts to the right by more than Rs 16 billion
   B. The aggregate demand curve shifts to the left by more than Rs 16 billion
   C. The aggregate demand curve shifts to the right by more than Rs 16 billion
   D. the aggregate supply curve shifts to the left by more than Rs 16 billion

3. Total increases from Rs500 to Rs600 when output increases from 20 to 30 units. Fixed costs are Rs200 Which of the following is true ?

   A. Marginal cost is Rs20
   B. Average cost falls
   C. Variable cost rises by Rs100
   D. Average fixed cost is Rs10

4. If the marginal propensity to consume on domestic products is 0.9 the size of the multiplier is ?

   A. 10
   B. 1
   C. 9
   D. 0.1

5. Assuming there is no government or foreign sector, if the multiplier is 2.5 the MPC is ?

   A. 4
   B. 25
   C. 6
   D. 2.5

6. Assuming there is no government or foreign sector, if the MPC is 8 the multiplier is ?

   A. 5
   B. 8
   C. 2
   D. 1.25

7. Assuming there is no government or foreign sector the formula for the multiplier is ?

   A. 1/MPS
   B. 1/(1+ MPC)
   C. 1 – MPC
   D. 1/MPC

8. The multiplier tells us how much __________ changes after a shift in ____________?

   A. consumption income
   B. investment output
   C. savings investment
   D. output aggregate demand

9. If the MPC is 0.5 the multiplier is ?

   A. 2
   B. 1/2
   C. 0.2
   D. 20

10. A bank has excess reserves to lend but is unable to find anyone to borrow the money This will _________ the size of the money multiplier?

    A. reduce
    B. have no effect on
    C. increase
    D. double