The consumption function is given by C = 100 + 0.8y and the investment is given by I = 50. For which of the following level of output the level of unplanned inventories would be negative?
Tap an option to check your answer.
4 marks, −1MacroeconomicsKeynesian cross and the multiplierKeynesian cross equilibriumModerateabout 1 min
CUET-PG 2023 Shift 2 Question 74: Keynesian cross and the multiplier
Answer and worked solution
Checking your account…
Keynesian cross and the multiplier has come up 167 times in 7 exams since 2006.
What this question tests
This question is on Keynesian cross equilibrium, part of Keynesian cross and the multiplier in Macroeconomics.
How income is determined when output adjusts to planned spending, and what happens to unplanned inventories.
TestStop has 35 past-paper questions on this subtopic; the nearest in year are below.
Similar questions from other papers
- If consumption is C = 40 + 0.75y, Investment is I = 60, The output, consumption and saving at the equilibrium will be _ respectively
- What is the formula of Super Multiplier?
- Which of the following is not correct about the effect of taxes on income and output?
- For a closed economy with no government expenditure and taxes, the aggregate consumption function (C) is given by: C = 100 + 0.75 Y_d where Y_d is the disposable…
- An economy saves 25% of its national income and invests a sum of Rs.1000 each year. The economy starts with Rs.10,000 as its initial national income. Assume that the…
Question from the CUET-PG 2023 Shift 2 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.