Equilibrium of Income, Consumption And Investment - SS3 Economics Past Questions & Answers - page 1

1

In the equation Y = C + I, what does Y represent?

A

Consumption expenditure

B

Investment expenditure

C

The level of income in the economy

D

The level of savings in the economy

 

CORRECT OPTION: c
2

Which of the following factors can affect the consumption function in the equation C = f(Y)?

A

 Interest rates

B

Government policy

 

C

Business investment decisions

D

International trade

CORRECT OPTION: a
3

What is the equilibrium condition in the equation Y = C + I?

A

The level of output is equal to the level of expenditure

B

The level of consumption is equal to the level of investment

 

C

The level of income is equal to the level of savings

D

The level of investment is equal to the level of savings

CORRECT OPTION: a
4

What is the difference between Y and f(Y) in the equation Y - f(Y) = I?

A

The difference between income and investment

B

The difference between consumption and investment

 

C

The difference between income and consumption

D

The difference between income and savings

CORRECT OPTION: c
5

How is the equilibrium level of income determined in the economy?

A

By trial and error

B

By using graphical analysis

C

By using calculus

 

D

All of the above

CORRECT OPTION: d
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