n Marginal Propensity to Save (MPS): Ratio of change in saving to change in income. ΔS/ΔY n S ubjective Factors : I nternal factors related to Psychological feeling n Objective Factors : External factors which are real and measurable. n Demonstration effect : the tendency to imitate superior consumption pattern. n Induced investment : Additional investment demand that results from an increase in domestic product (GDP) n Multiplier : ratio of change in income to change in investment.
ΔY/ΔI n Accelerator : ratio of change in induced investment to change in consumption. (or) Technical relationship between change in capital stock and change in level of output. n Super Multiplier : The combined effect of interaction of multiplier and accelerator. - - Consumption and Investment Functions .
The average propensity to consume is measured by a) C/Y b) CxY c) Y/C d) C+Y . An increase in the marginal propensity to consume will: a) Lead to consumption function becoming steeper b) Shift the consumption function upwards c) Shift the consumption function downwards d) Shift savings function upwards . If the Keynesian consumption function is C= + . Y then, if disposable income is Rs , what is amount of total consumption?
a) ₹ . b) ₹ c) ₹ d) ₹ . . If the Keynesian consumption function is C= + .8Y then, when disposable income is Rs , what is the marginal propensity to consume?
a) ₹ . b) ₹ c) ₹ d) ₹ . . If the Keynesian consumption function is C= + .
Y then, and disposable income is , what is the average propensity to consume? a) ₹ . b) ₹ c) ₹ d) ₹ . .
As national income increases a) The APC falls and gets nearer in value to the MPC. b) The APC increases and diverges in value from the MPC. c) The APC stays constant d) The APC always approaches infinity. .
As increase in consumption at any given level of income is likely to lead a) Higher aggregate demand b) An increase in