Investment Function: AP Macroeconomics Online Test

Autonomous Investment is influenced by: I. Expected Profitability II. Level of Income III. Level of Aggregate Demand in the Economy
I only
II only
III only
I and III
II and III
Inducement to invest is dependent upon: I. Rate of Interest II. Expected Profitability III. Revenue from Investment
I only
II only
III only
II and III
I, II and III
The Marginal Efficiency of Capital depends upon: I. Supply Price of the Capital II. The Prospective Yield III. Depreciation
I only
II only
III only
I and II
II and III
An Entrepreneur will continue to make investment till:
The Marginal Efficiency of Capital becomes double of the Supply
The Marginal Efficiency of Capital becomes half of the price
The Marginal Efficiency of Capital is less than the Rate of Interest
The Marginal Efficiency of Capital is more than the Rate of Interest
None of the above
Ex-post Savings is:
Always equal to Ex-post Investment
Not equal to Ex-post Investment
Always greater than Ex-post Investment
Always less than Ex-post Investment
Not related to Ex-post Investment
Ex-ante Savings are:
Always equal to Ex-Ante Investment
Equal to Ex-Ante Investment at Equilibrium
Equal to Ex-Post Savings
Equal to Ex-Post Investment
None of the above
The amount of Savings is the:
Excess of Expenditure over the figure of available Income
Excess of Current Income over Consumption
Excess of Available Income over previous Year’s Savings
Sum of Savings made by all factors
Excess of Consumption over Current Income
The Curve of Marginal Efficiency of Capital shows the demand for Investment or Inducement to invest at various levels of: I. Rates of Profit II. Rates of Interest III. Income
I only
II only
III only
I and II
I and III
Prospective yield of an Asset:
Includes estimating the annual return from the Capital Assets
Is the excess of total revenue obtained from sale of output produced by the Capital Asset over the cost of production
Is the aggregate net return expected from the asset during its entire life
Increases with rise in prices
All of the above
Supply Price is also known as the:
Marginal Efficiency of Capital
Replacement Cost
Rate of Return
Rate of Profitability
Marginal Efficiency of Investment

The Aggregate Demand consists of two components: Consumption and Investment. The Investment Function includes some interesting concepts related to Induced Investment, Autonomous Investment, Ex-ante Investment, Ex-post Investment and Determinants of Investment. Here is a 7-minute short Multiple Choice questions test relating to Investment. While taking this test, go through all the options very carefully. Try out this and assess your knowledge relating to this important constituent of Aggregate Demand.

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