ECS 1601
Study Unit 6 Quiz
Multiple Choice Questions (MCQ’s)
1. The consumption schedule shows that
[1] the marginal propensity to consume increases as GDP increases
[2] households increase their spending when their wealth increases
[3] an increase in income leads to an equivalent increases in consumption expenditure
[4] an increase in income increases consumption by an amount smaller than the increases
in income
2. Jabu’s monthly disposable income increases from R2000 to R2500. As a result his monthly
saving increases from R300 to R450. This implies that his marginal propensity to consume is
the following:
[1] 0.30
[2] 0.70
[3] 0.76
[4] 0.82
3. If the interest rate is high, investment will be _______, and if income increases it will ______
on investment because investment is a type of _________ spending.
[1] low; no effect; autonomous
[2] high; a positive effect; induced
[3] low; a negative effect; induced
[4] high; no effect; autonomous
4. Paradox of thrift is:
[1] when consumer save more due to a favourable economic environment, but instead
causing the economy to worsen
[2] when consumer spend more due to a unfavourable economic environment, but instead
causing the economy to worsen
[3] when consumer save more due to a unfavourable economic environment, but instead
causing the economy to worsen
[4] when consumer spend more due to a favourable economic environment, but instead
causing the economy to worsen
Quiz will be discussed on your e-tutor site from Monday 24 March Page 1
This study source was downloaded by 100000847097152 from CourseHero.com on 04-18-2023 12:52:51 GMT -05:00
https://www.coursehero.com/file/16707056/Quiz-Study-Unit-6/
Study Unit 6 Quiz
Multiple Choice Questions (MCQ’s)
1. The consumption schedule shows that
[1] the marginal propensity to consume increases as GDP increases
[2] households increase their spending when their wealth increases
[3] an increase in income leads to an equivalent increases in consumption expenditure
[4] an increase in income increases consumption by an amount smaller than the increases
in income
2. Jabu’s monthly disposable income increases from R2000 to R2500. As a result his monthly
saving increases from R300 to R450. This implies that his marginal propensity to consume is
the following:
[1] 0.30
[2] 0.70
[3] 0.76
[4] 0.82
3. If the interest rate is high, investment will be _______, and if income increases it will ______
on investment because investment is a type of _________ spending.
[1] low; no effect; autonomous
[2] high; a positive effect; induced
[3] low; a negative effect; induced
[4] high; no effect; autonomous
4. Paradox of thrift is:
[1] when consumer save more due to a favourable economic environment, but instead
causing the economy to worsen
[2] when consumer spend more due to a unfavourable economic environment, but instead
causing the economy to worsen
[3] when consumer save more due to a unfavourable economic environment, but instead
causing the economy to worsen
[4] when consumer spend more due to a favourable economic environment, but instead
causing the economy to worsen
Quiz will be discussed on your e-tutor site from Monday 24 March Page 1
This study source was downloaded by 100000847097152 from CourseHero.com on 04-18-2023 12:52:51 GMT -05:00
https://www.coursehero.com/file/16707056/Quiz-Study-Unit-6/
