The 'investment multiplier' is greater when the marginal propensity to consume is: MCQ with Answer and Explanation

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The 'investment multiplier' is greater when the marginal propensity to consume is:

A. zero

B. negative

C. lower

D. higher

Answer: Option D

Solution (By JKSSB Mock Tests)

The multiplier is higher when MPC is higher because more of each income increase is spent.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Rashtriya Krishi Vikas Yojana' aims at:

A. industrial growth

B. urban housing

C. tourism development

D. agricultural development and infrastructure

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Correct Answer: Option D

Explanation:
RKVY aims at promoting agricultural development and related infrastructure.

This question belongs to: Economy GK Economy Set 1

Question #2

The concept of 'Liquidity Preference' theory explains the determination of:

A. Real wages

B. Rate of interest

C. Profit rate

D. Rent on land

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Correct Answer: Option B

Explanation:
According to Keynes, the rate of interest is determined by the demand for money (liquidity preference) and the supply of money.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Goods and Services Tax' on warehousing services is:

A. 5%

B. 28%

C. 12%

D. 18%

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Correct Answer: Option D

Explanation:
Warehousing services attract 18% GST.

This question belongs to: Economy GK Economy Set 1

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