Managerial Economics MCQs and Notes

P

Praveen Singh

🎓 Tutor III ⭐ 36.81K Points

Q. If the tax function is T= t0+t1y where t1 equals 1/3,and if the marginal propensity to consume out of disposable income is 3/4 , then the change in GDP oer unit change into t0 (∆Y/∆ t0) will be

(A) -1
(B) +1
(C) -1.5
(D) -2

💬 Discuss

✅ Correct Answer: (C) -1.5

A

Admin

🎓 Coach ⭐ 38.37K Points

📊 Managerial Economics

Q. The role of the progressive tax system as an autonomous fiscal stabilizer requires that the budget

(A) Should require actual deficits be equal to zero on average
(B) Should go into a surplus at appropriate points in the business cycle.
(C) Cannot have a structural deficit component
(D) Both a & b

💬 Discuss

✅ Correct Answer: (B) Should go into a surplus at appropriate points in the business cycle.

S

Shiva Ram

🎓 Master ⭐ 30.44K Points

📊 Managerial Economics

Q. If the tax function is given by T= -20+0.1 Y the average tax rate would

(A) Be 0.1
(B) Fall as income falls
(C) Vary negatively with income
(D) Be -20 _0.1

💬 Discuss

✅ Correct Answer: (B) Fall as income falls

V

Vijay Sangwan

🎓 Mover ⭐ 28.62K Points

📊 Managerial Economics

Q. Suppose that the MPC out of disposable income was 0.8 and the tax function for a given economy was T= -30+0.25Y. an increase in the intercept of the tax function of 10 units(from -30 to -20 would cause equilibrium income in the simple Keynesian model to fall by

(A) -20 units
(B) 10 units
(C) 20 units
(D) 40 units

💬 Discuss

✅ Correct Answer: (C) 20 units

S

Shiva Ram

🎓 Master ⭐ 30.44K Points

📊 Managerial Economics

Q. Suppose that the MPC out of disposable income was 0.8 and the marginal tax rate was 0.25 for a given economy. In this case, the value of the tax multiplier in the simple Keynesian model would be