Q1: 1. What does the aggregate demand curve represent in the determination of income and employment?

• A) The total quantity of goods and services demanded at different price levels
• B) The total quantity of goods and services supplied at different price levels
• C) The total quantity of money supply in the economy
• D) The total quantity of labor available in the market

Q2: 2. In the Keynesian model, which of the following factors can lead to an increase in national income and employment?

• A) Decrease in government spending
• B) Increase in interest rates
• C) Increase in consumer spending
• D) Decrease in exports

Q3: 3. What is the relationship between the marginal propensity to consume and the multiplier effect in determining income and employment?

• A) They are inversely related
• B) They are directly proportional
• C) They are unrelated
• D) They have a negative impact on each other

Q4: 4. How does an increase in investment in capital goods affect income and employment in the economy?

• A) It leads to a decrease in income and employment
• B) It has no impact on income and employment
• C) It leads to an increase in income and employment
• D) It leads to inflation

Q5: 5. Which of the following is an example of an expansionary fiscal policy to stimulate income and employment?

• A) Decreasing government spending
• B) Increasing taxes
• C) Increasing government spending
• D) Decreasing interest rates

Q6: 6. What is the role of the central bank in influencing income and employment through monetary policy?

• A) Increase money supply to reduce income and employment
• B) Decrease interest rates to increase income and employment
• C) Increase taxes to stimulate income and employment
• D) Decrease government spending to boost income and employment

Q7: 7. How does technological advancement impact income and employment levels in an economy?

• A) It leads to a decrease in income and employment
• B) It has no impact on income and employment
• C) It leads to an increase in income and employment
• D) It leads to a decrease in consumer spending

Q8: 8. Which of the following is a component of aggregate demand in the determination of income and employment?

• A) Government borrowing
• B) Household savings
• C) Corporate profits
• D) Foreign exchange rates

Q9: 9. How does the concept of inflation impact income and employment in the long run?

• A) It leads to a decrease in income and employment
• B) It has no impact on income and employment
• C) It leads to an increase in income and employment
• D) It leads to a decrease in consumer spending

Q10: 10. In the context of income and employment determination, what does the Phillips curve illustrate?

• A) The relationship between inflation and unemployment
• B) The relationship between government spending and income
• C) The relationship between exports and imports
• D) The relationship between interest rates and savings

Q11: 11. How does a decrease in consumer confidence affect income and employment in an economy?

• A) It leads to an increase in income and employment
• B) It has no impact on income and employment
• C) It leads to a decrease in income and employment
• D) It leads to an increase in government spending

Q12: 12. Which of the following is considered a leakage from the circular flow of income that can impact employment levels?

• A) Government spending
• B) Savings
• C) Investment
• D) Exports

Q13: 13. What happens to income and employment levels when there is a decrease in imports in an economy?

• A) Income and employment decrease
• B) Income and employment increase
• C) Income decreases but employment increases
• D) Income increases but employment decreases

Q14: 14. How does an increase in the minimum wage impact income and employment in the short run?

• A) It leads to an increase in income and employment
• B) It has no impact on income and employment
• C) It leads to a decrease in income and employment
• D) It leads to an increase in imports

Q15: 15. Which of the following is a factor that can lead to a decrease in aggregate demand and affect income and employment?

• A) Increase in government spending
• B) Increase in consumer confidence
• C) Increase in interest rates
• D) Increase in exports

Q16: 16. How does the government's fiscal deficit impact income and employment in the long run?

• A) It leads to an increase in income and employment
• B) It has no impact on income and employment
• C) It leads to a decrease in income and employment
• D) It leads to an increase in investments

Q17: 17. What role does consumer spending play in determining income and employment levels in an economy?

• A) It has no impact on income and employment
• B) It leads to a decrease in income and employment
• C) It leads to an increase in income and employment
• D) It leads to a decrease in government spending

Q18: 18. How does an increase in exports impact income and employment in an economy?

• A) It leads to a decrease in income and employment
• B) It has no impact on income and employment
• C) It leads to an increase in income and employment
• D) It leads to a decrease in consumer confidence

Q19: 19. Which of the following is an example of an automatic stabilizer in the determination of income and employment?

• A) Unemployment benefits
• B) Corporate tax cuts
• C) Infrastructure spending
• D) Trade barriers

Q20: 20. How does a decrease in business investment affect income and employment levels in an economy?

• A) It leads to a decrease in income and employment
• B) It has no impact on income and employment
• C) It leads to an increase in income and employment
• D) It leads to inflation

Q21: 21. What impact does a decrease in government spending have on income and employment in the short run?

• A) It leads to an increase in income and employment
• B) It has no impact on income and employment
• C) It leads to a decrease in income and employment
• D) It leads to an increase in imports

Q22: 22. How does the concept of income inequality affect overall income and employment levels in an economy?

• A) It leads to a decrease in income and employment
• B) It has no impact on income and employment
• C) It leads to an increase in income and employment
• D) It leads to a decrease in consumer spending

Q23: 23. Which of the following factors can lead to an increase in aggregate supply in the determination of income and employment?

• A) Decrease in productivity
• B) Increase in wages
• C) Increase in technology
• D) Decrease in labor force

Q24: 24. How does a reduction in income taxes impact income and employment in the short term?

• A) It leads to an increase in income and employment
• B) It has no impact on income and employment
• C) It leads to a decrease in income and employment
• D) It leads to an increase in government spending

Q25: 25. What role do government policies play in influencing income and employment levels in an economy?

• A) They have no impact on income and employment
• B) They can only influence income levels, not employment
• C) They can influence both income and employment levels
• D) They only impact income distribution, not overall income levels