Skip to content
We use only essential cookies to keep you signed in and remember your preferences. See our Cookie Policy.
TestStop
MocksPracticeResourcesIndiaBlogPricing
Sign in
Questions › JNU › JNU SSS 2013 › Q28
1 mark, −0.25Macroeconomics › Keynesian cross and the multiplier › Keynesian cross equilibriumEasyabout 1 min

JNU SSS 2013 Question 28: Keynesian cross and the multiplier

Consider an economy in which the consumption function is given by C=400+0⋅6(Y−T)C = 400 + 0{\cdot}6(Y - T)C=400+0⋅6(Y−T). Investment (I)(I)(I) is 120, government purchases (G)(G)(G) and taxes (T)(T)(T) are both 100.

The equilibrium level of income is

Tap an option to check your answer.

Answer and worked solution

Checking your account…

Plain-text version

Consider an economy in which the consumption function is given by C = 400 + 0·6(Y - T). Investment (I) is 120, government purchases (G) and taxes (T) are both 100. The equilibrium level of income is (A) 1000 (B) 1200 (C) 1300 (D) 1400

Also written as: Consider an economy in which the consumption function is given by C = 400 + 0*6(Y - T). Investment (I) is 120, government purchases (G) and taxes (T) are both 100. The equilibrium level of income is

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.

  • IIT JAM 2021 · Q28According to John Maynard Keynes, which one of the following statements is correct for a closed economy…
  • IIT JAM 2022 · Q37Which of the following statements is/are CORRECT under the Keynesian Cross (Fixed Price) Model?
Practise Keynesian cross and the multiplierMore on Keynesian cross equilibrium

Similar questions from other papers

  • CUET-PG 2026 · Q14If consumption is C = 40 + 0.75y, Investment is I = 60, The output, consumption and saving at the equilibrium will be _ respectively
  • UGC-NET 2026 · Q56What is the formula of Super Multiplier?
  • CUET-PG 2025 · Q12Which of the following is not correct about the effect of taxes on income and output?
  • GATE 2025 · Q40For 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…
  • IIT JAM 2025 · Q53An 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 JNU SSS 2013 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.