The concept of 'Multiplier' in Keynesian economics is related to: MCQ with Answer and Explanation

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The concept of 'Multiplier' in Keynesian economics is related to:

A. Change in tax rate and change in revenue

B. Change in investment and change in income

C. Change in money supply and change in prices

D. Change in interest rate and change in investment

Answer: Option B

Solution (By JKSSB Mock Tests)

The investment multiplier shows how much income increases as a result of an initial increase in investment. Multiplier = 1/(1-MPC).

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'Factories Act' in India was enacted in which year?

A. 1948

B. 1956

C. 1950

D. 1947

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Correct Answer: Option A

Explanation:
The Factories Act was enacted in 1948.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'unemployment rate' under usual status considers a person unemployed if:

A. not working for a long period and seeking work

B. not working for a week

C. retired

D. not working for one day

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Correct Answer: Option A

Explanation:
Usual status unemployment refers to unemployment over a long reference period.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is NOT a function of the Reserve Bank of India?

A. Formulating fiscal policy

B. Acting as banker to the government

C. Issuing currency notes

D. Controlling credit

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Correct Answer: Option A

Explanation:
Fiscal policy is formulated by the government (Ministry of Finance). RBI is responsible for monetary policy, currency issue, banker to government and credit control.

This question belongs to: Economy GK Economy Set 1

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