Class XII

The law of Psychological consumption states
  1. Consumption changes in the same direction as investment
  2. Consumption does not change in the same direction as income
  3. Consumption changes in the opposite direction as income
  4. Consumption changes in the same direction as income
In a two sector economy Aggregate Demand equals
  1. Consumption + Exports
  2. Consumption + Investment
  3. Consumption + Private consumption expenditure
  4. Consumption + Government Expenditure
APS=
  1. SY
  2. None of these
  3. CS
  4. SD
The investment demand function is
  1. The relationship between investment demand and the rate of interest
  2. The relationship between investment demand and the consumption expenditure
  3. The relationship between investment demand and the National income
  4. The relationship between investment demand and the disposable income
APC+APS=
  1. 1.0
  2. 2
  3. 4
  4. 3
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