Multiple Choice Questions on Under Keynesian theory of income determination investment ........ for 12th Standard Preparation

Introductory Macro Economics

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    Under Keynesian theory of income determination, investment

    Depends on income

    Incorrect Answer

    Endogenous

    Incorrect Answer

    Exogenous

    Correct Answer

    Depends on money supply

    Incorrect Answer
    Explanation:

    - Option 1: Depends on income

    Investment decisions are largely influenced by investor expectations and interest rates, not directly by current income levels.

    - Option 2: Endogenous

    Endogenous factors are determined within the model. However, Keynesian economics typically views investment as not purely determined by current economic variables.

    - Option 3: Exogenous

    Investment is determined by factors external to the current economic model, such as technological changes and investor confidence.

    - Option 4: Depends on money supply

    While money supply can influence interest rates, which in turn affect investment, it’s not directly connected as per Keynesian theory.

    In Keynesian theory, investment is usually considered exogenous.


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