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Excess demand generates greater employment opportunities in the economy.

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Important Questions on Determination of Income and Employment

EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Deflationary gap indicates _____ demand in an economy
MEDIUM
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
When investment multiplier is 1, the value of marginal propensity to consume is _____. 
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. 
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
An increase of Rs 200 crores in investment leads to a rise of Rs 700 crores in the national income, then value of multiplier is _____. 
HARD
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
Decrease in Cash Reserve Ratio will lead to _____ in Aggregate Demand.
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
_____ refers to a situation when AD is equal to AS beyond the full employment equilibrium.
HARD
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
To correct the inflationary gap, money supply should be _____.
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
If income generated is four times the increase in investment expenditure, then value of MPC is _____. 
HARD
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
In case of deficient demand, RBI _____ cash reserve ratio.
MEDIUM
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
If the ratio between MPC and MP8 is given 3:2, then the value of multiplier would be _____
HARD
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
During _____ demand, aggregate demand is insufficient to eliminate involuntary unemployment.
MEDIUM
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
If MPS = 0.10 and investment is increased by ₹ 300 crores, then total increase in income will be _____.
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
The gap by which actual aggregate demand exceeds the aggregate demand required to establish full employment equilibrium is known as _____.
HARD
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
In an economy, the entire increase in income is spent on consumption. The value of multiplier will be _____. 
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
The excess of aggregate demand over aggregate supply at full employment level is called_____
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 _____. 
EASY
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
If MPC and MPS are equal, then the value of the multiplier is _____.
HARD
Economics>Macroeconomics>Determination of Income and Employment>Multiplier Mechanism
During excess demand, Central Bank _____ the margin.