Practice Income and Employment - 2.2.1 | Chapter 2: Theory of Income and Employment | ICSE Class 12 Economics
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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What does aggregate demand consist of?

πŸ’‘ Hint: Think about the components that influence total demand.

Question 2

Easy

What is the effect of an increase in government spending?

πŸ’‘ Hint: Consider how government projects create jobs and income.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is aggregate demand?

  • Total consumer spending only
  • Total demand for goods and services in an economy
  • Total government expenditure

πŸ’‘ Hint: Think about the different ways people and businesses demand goods.

Question 2

True or False: Unemployment can only be frictional.

  • True
  • False

πŸ’‘ Hint: Recall the different employment classifications discussed.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

Calculate the effect of a government spending increase of $500 million on aggregate demand if the marginal propensity to consume (MPC) is 0.8.

πŸ’‘ Hint: Use the multiplier effect to find the total increase in aggregate demand.

Question 2

Discuss how a significant rise in interest rates might lead to higher unemployment levels in an economy.

πŸ’‘ Hint: Consider the relationship between interest rates, consumer behavior, and business investment.

Challenge and get performance evaluation