Question : Consider the given consumption function of country X and answer the following question.
C = 100 + 0.8Y
What is the value of autonomous consumption (A) and marginal propensity to consume (MPC) in the given equation?
Option 1: A = 0.8, MPC = 100
Option 2: A = 100, MPC = 80
Option 3: A = 80, MPC = 0.10
Option 4: A = 100, MPC = 0.8
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Correct Answer: A = 100, MPC = 0.8
Solution : The correct option is A = 100, MPC = 0.8.
In the consumption function C = 100 + 0.8Y, autonomous consumption (A) is the constant term, which is 100. The marginal propensity to consume (MPC) is the coefficient of the income term (Y), which is 0.8. This represents the proportion of additional income consumed, indicating a high consumption propensity.
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Question : Collective consumption means
Option 1: household consumption
Option 2: individual consumption
Option 3: self-consumption
Option 4: consumption by the citizens of the country
Question : A house was sold for Rs. $y$ by giving a discount of $x$% then the list price was:
Option 1: $\frac{100y}{100-x}$
Option 2: $\frac{100y}{1-\frac{x}{100}}$
Option 3: $\frac{100x}{100-y}$
Option 4: $\frac{100y}{1-x}$
Question : It is possible to derive the value of the Gross Domestic Product (GDP) of a country. Which function of money is applicable here?
Option 1: Store of value
Option 2: Unit of account
Option 3: Standard of deferred payments
Option 4: Medium of exchange
Question : In which of the following ways is the aggregate demand function related to the consumption function? I. They have the same slope C. II. The aggregate demand function is parallel to the consumption function.
Option 1: Neither I nor II
Option 2: Only II
Option 3: Only I
Option 4: Both I and II
Question : What is the value of $(x+1)\left(x^2-x+1\right)$ ?
Option 1: $x^3-1$
Option 2: ${x}^3+{x}$
Option 3: $x^3+1$
Option 4: ${x}^3-{x}$
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