The 'consumption function' in Keynesian economics is usually expressed as: MCQ with Answer and Explanation

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The 'consumption function' in Keynesian economics is usually expressed as:

A. C = a + bY

B. Y = C + I

C. S = I

D. MV = PT

Answer: Option A

Solution (By JKSSB Mock Tests)

The Keynesian consumption function is C = a + bY, where a is autonomous consumption and b is MPC.

This question belongs to: Economy GK Economy Set 1

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The 'Atal Incubation Centre' scheme supports:

A. large industries

B. government departments

C. foreign companies

D. startups and entrepreneurs

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Correct Answer: Option D

Explanation:
Atal Incubation Centres support startups and entrepreneurs.

This question belongs to: Economy GK Economy Set 1

Question #2

The term 'Crowding In' refers to:

A. Increase in imports due to higher income

B. Increase in private investment stimulated by government spending

C. Decrease in exports due to appreciation

D. Decrease in private investment due to government spending

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Correct Answer: Option B

Explanation:
Crowding in occurs when government spending (especially on infrastructure) raises the productivity of private capital and stimulates additional private investment.

This question belongs to: Economy GK Economy Set 1

Question #3

In the context of national income accounting, which of the following is a transfer payment and not included in national income?

A. Wages and salaries

B. Interest on public debt

C. Profits

D. Rent

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Correct Answer: Option B

Explanation:
Interest on public debt is a transfer payment and is not included in national income as it does not correspond to any current production of goods or services.

This question belongs to: Economy GK Economy Set 1

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