Important Questions on Multiplier Economics for all Upcoming Competitive Exams

Important Questions on Multiplier Economics

Important Questions on Multiplier Economics / Important Question on Multiplier (Economics) / Important Questions on Multiplier /Top Ten question on Multiplier (Economics) / MCQ’s on Multiplier (Economics) / Questions asked in previous year exams on Multiplier (Economics)

Important Questions on Multiplier (Economics) :Keynes in his book “General Theory of Employment, Interest & Money’ in 1936 developed the concept of investment multiplier. It relates to the change in income to the change in Investment. The number of times income increases as a result of increase in the level of investment is known as Multiplier.

K = ∆Y/∆I [∆Y=Change in income,∆I=Change in investment,K=Multiplier]


Important Questions on Multiplier Economics

1. The value of multiplier determined by :
(a) Marginal Propensity to consume
(b) Marginal Propensity to save
(c) Investment
(d) Expenditure

2. There is a ________ relationship between Marginal Propensity to consume and multiplier.
(a) Opposite
(b) Direct
(c) Parallel
(d) No relation

3. Keynes ‘concept of Multiplier is ________ Concept.
(a) Dynamic
(b) Rigid
(c) Static
(d) All of the above

4. If investment is increased only once, it will result into change in income only once, it is called :
(a) Continuous injections
(b) Single injections
(c) Withdrawal
(d) None of these

5. Effect of multiplier will be permanent if there will be________ injections of investment.
(a) Large
(b) Continuous
(c) Irregular
(d) Daily

Important Questions on Multiplier Economics

6. Factors responsible for lowering the value or multiplier is known as :
(a) Injections
(b) Interruption
(c) Leakages
(d) Savings

7. Leakages of multiplier includes:
(a) Idle savings
(b) Paying of old debts
(c) Import
(d) All of the above

8. If increase in investment leads to increase in employment everywhere, it is called:
(a) Invest multiplier
(b) Employment multiplier
(c) Foreign Trade multiplier
(d) None of these

9. Size of Multiplier also depends upon :
(a) Induce investment
(b) Autonomous investment
(c) Both (a) & (b)
(d) Foreign investment

10. If Marginal Propensity to consume is high, they will spend high percentage of their income on ____________.
(a) Investment
(b) Consumption
(c) Spending
(d) All of the above



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1. a
2. b
3. c
4. b
5. b
6. c
7. d
8. b
9. c
10. b

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