introduction to macro economics section 6 MCQ Questions & Answers Detailed Explanation

Answer: (b)

The Consumption function is a single mathematical function used to express consumer spending.

It was developed by John Maynard Keynes and detailed most famously in his book The General Theory of Employment, Interest, and Money.

It is made up of autonomous consumption that is not influenced by current income and induced consumption that is influenced by the economy's income level.

Answer: (d)

Pareto efficiency is said to occur when it is impossible to make one party better off without making someone worse off.

An inefficient situation is one where it is possible to make some people better off without making anyone else worse off.

Answer: (a)

Gross National Product (GNP) is the market value of all products and services produced in one year by labour and property supplied by the residents of a country.

Basically, GNP is the total value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens (including income of those located abroad), minus income of non-residents located in that country.

GNP measures the value of goods and services that the country’s citizens produced regardless of their location.