Determination of Income and Employment: Class 12 Economics (Bihar Board) important questions and practice
Determination of Income and Employment is chapter 4 of 14 in Bihar Board Class 12 Economics. Below are the topics the paper draws from, the question types that come up again and again, and a free practice test on this chapter alone.
Topics in this chapter
- Aggregate demand and its components; aggregate supply
- Consumption function, saving function, MPC, MPS, APC, APS
- Short-run equilibrium output: AD = AS and S = I approaches
- Investment multiplier and its working
- Excess demand and deficient demand (inflationary and deflationary gaps)
- Measures to correct excess and deficient demand: fiscal and monetary
What examiners usually ask
- Explain the determination of equilibrium level of income using the AD-AS approach with a diagram
- If MPC is 0.8 and investment increases by Rs 100 crore, calculate the change in income and explain the working of the multiplier
- What is deficient demand? Explain the role of the bank rate and open market operations in correcting it
Exam tip
Draw the Keynesian cross diagram with the 45-degree line and label the equilibrium point, derive K = 1/(1-MPC) = 1/MPS and show two or three rounds of the multiplier process; the 'what happens when planned saving exceeds planned investment' adjustment is a frequent 4-mark question.
Determination of Income and Employment on other boards and exams
Frequently asked questions
What are the important questions from Determination of Income and Employment for Bihar Board Class 12?
The question types listed above repeat most often in Bihar Board Class 12 Economics papers for this chapter. Practise them with the chapter test and then attempt them inside a full previous-year paper under time.
Is Determination of Income and Employment in the Bihar Board Class 12 Economics syllabus?
Yes. Determination of Income and Employment is part of the current Bihar Board Class 12 Economics syllabus, as listed on this site from the prescribed textbook.
Can I practise Determination of Income and Employment MCQs in Hindi?
Yes. The chapter test and explanations are available in Hindi and English, with an AI doubt solver for any question.