The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the ?

Related Mcqs:

1. Real business cycles are cycles in ?

   A. potential output
   B. actual output
   C. real output
   D. international trade

2. When economists use the term real business cycle theory they are suggesting that business cycles are caused by ?

   A. Shifts in aggregate supply
   B. changes in export demand due to the state of the world economy
   C. business confidence
   D. business expectations

3. A linear consumption function with a positive slope less than one means that if income increases consumption will ?

   A. fall
   B. not change
   C. fluctuate
   D. increase

4. If the Keynesian consumption function is C = 10 + 0.8 Td when disposable income is Rs1000 total consumption is what ?

   A. 0.8
   B. 800
   C. 810
   D. 0.81

5. If the consumption of good by one person does not reduce the quantity available by others and nobody can be easily excluded from consumption, we are referring to a ?

   A. Private good
   B. merit good
   C. public good
   D. abundant good

6. With whom would you associate the following quote” The business of business is business” ?

   A. Milton Friedman
   B. Adam smith
   C. Alfred Marshal
   D. Karl Marx

7. The accelerator theory of investment says that induced investment is determined by ?

   A. the level of national income
   B. the level of aggregate demand
   C. the rate of change of national income
   D. expectations

8. When supply exceeds demand, sellers must lower prices to stimulate sales, when demand exceeds supply, prices increase as buyers compete to buy goods. What this theory is called in economics?

   A. Cost push theory
   B. Supply and Demand theory
   C. Fundamental theory
   D. Ricardo’s theory

9. If GDP = Rs1,000 Consumption = Rs 600 taxes = Rs 100, and government purchases = Rs200, how much is saving and investment ?

   A. Saving = Rs 300 investment = Rs 300
   B. Saving = Rs 200 investment = Rs 100
   C. Saving = Rs 100 investment = Rs 200
   D. Saving = Rs 0 investment = Rs 0

10. One of the transmission mechanisms of monetary policy is through consumer demand when interest rates ________ household wealth ________ and consumption _________?

    A. rise; increase, increase
    B. rise, falls, increase
    C. rise, increase, falls
    D. rise, falls, falls