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During demand, aggregate demand is insufficient to eliminate involuntary unemployment.

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Important Questions on Determination of Income and Employment

EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Sale of government securities by the central bank in the open market is an appropriate policy to check depression in the economy.
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
If MPC and MPS are equal, then the value of the multiplier is _____.
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Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Which of the following is the correct formula for calculating output multiplier?
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Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
To check inflation, the central bank should reduce the cash reserve ratio.
MEDIUM
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Value of investment multiplier varies between zero and infinity. 
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Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Decrease in margin requirements helps to control the situation of _____ demand.
MEDIUM
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
MPC = 0.60 and as a result of multiplier effect, National Income increased by Rs 500 crores by an additional investment of Rs _____. 
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Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
_____ supply is the money value of total supply of goods and services available for _____ by an economy. 
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
The excess of aggregate demand over aggregate supply at full employment level is called_____
HARD
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Which of the following is true in the context of investment multiplier?
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Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
In case of deficient demand, RBI _____ cash reserve ratio.
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
An increase in the bank rate makes borrowing costlier for the general public.
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
The deflationary gap can be corrected by raising the level of aggregate demand.
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
There is an _____ relationship between the value of marginal propensity to save and investment multiplier. 
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Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Voluntary _____ is that part of the working force not willing to engage itself in gainful _____.
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
To correct the inflationary gap, money supply should be _____.
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Explain 'Paradox of Thrift'.
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Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Cash reserve ratio is the share of a bank's total _____ to be maintained as _____ in the form of liquid cash as per the guidelines of RBI. 
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Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Excess demand leads to increase in prices in the long run.
MEDIUM
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
When marginal propensity to consume is greater than marginal propensity to save, the value of investment multiplier will be greater than 5.