The concept of 'Multiplier' in Keynesian economics is larger when: MCQ with Answer and Explanation

Question

Share Report Error

The concept of 'Multiplier' in Keynesian economics is larger when:

A. Tax rate is higher

B. Marginal propensity to consume is lower

C. Marginal propensity to consume is higher

D. Marginal propensity to save is higher

Answer: Option C

Solution (By JKSSB Mock Tests)

The investment multiplier = 1/(1−MPC). A higher marginal propensity to consume leads to a larger multiplier effect on income.

This question belongs to: Economy GK Economy Set 1

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Economy Set 1 Questions

Question #1

The 'unbalanced growth theory' was proposed by:

A. John Maynard Keynes

B. Arthur Lewis

C. Albert Hirschman

D. Paul Rosenstein-Rodan

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option C

Explanation:
Albert Hirschman proposed the theory of unbalanced growth.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'shadow economy' refers to:

A. unreported economic activities outside the formal sector

B. stock market

C. formal sector activities

D. banking sector

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option A

Explanation:
The shadow economy consists of unreported economic activities.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Bank for International Settlements' headquarters is in:

A. Geneva

B. Basel

C. Zurich

D. London

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option B

Explanation:
BIS headquarters is in Basel.

This question belongs to: Economy GK Economy Set 1

Explore All Economy Set 1 MCQs