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Questions › UGC-NET › UGC-NET 2025 › Q60
2 marksMacroeconomics › Keynesian cross and the multiplier › Government spending and tax multipliersModerateabout 1 min

UGC-NET 2025 Question 60: Keynesian cross and the multiplier

For the given information regarding an economy, the value of equilibrium level of income is:

C=100+0.75YdC = 100 + 0.75Y_dC=100+0.75Yd​; G=40G = 40G=40; I=60I = 60I=60; t=0.2t = 0.2t=0.2

(Here, C = consumption, YdY_dYd​ = disposable income, G = Govt. expenditure, I = Investment, t = tax rate)

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For the given information regarding an economy, the value of equilibrium level of income is: C = 100 + 0.75Y_d; G = 40; I = 60; t = 0.2 (Here, C = consumption, Y_d = disposable income, G = Govt. expenditure, I = Investment, t = tax rate) (A) 200 (B) 500 (C) 400 (D) 450

Keynesian cross and the multiplier has come up 167 times in 7 exams since 2006.

What this question tests

This question is on Government spending and tax multipliers, part of Keynesian cross and the multiplier in Macroeconomics.

The effect on income of changes in government spending, lump-sum taxes, transfers and income taxes.

TestStop has 45 past-paper questions on this subtopic; the nearest in year are below.

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Question from the UGC-NET 2025 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.