180+ Basics of Economics Solved MCQs

101.

Pick the odd one out:

A. real national income
B. ni at constant price
C. ni at current prices
D. ni at base year price
Answer» C. ni at current prices
102.

GDP deflator is given by:

A. nominal ni/real ni
B. nominal dgp/real gdp
C. nominal gdp/ nominal gnp
D. real gdp/real gnp
Answer» B. nominal dgp/real gdp
103.

Value of output minus intermediate consumption is:

A. depreciation
B. value added
C. net value added
D. net exports
Answer» B. value added
104.

Personal income minus personal taxes is:

A. national income
B. private income
C. disposable income
D. per capita income
Answer» C. disposable income
105.

National income is a --------variable.

A. flow
B. stock
C. static
D. dynamic
Answer» A. flow
106.

In India, National income is estimated at:

A. current prices
B. constant prices
C. both current and constant prices
D. none of these
Answer» C. both current and constant prices
107.

Which of the following is true:

A. gdp is a geographical concept
B. gdp is not a geographical concept
C. gdp and gnp are same
D. none of them
Answer» A. gdp is a geographical concept
108.

GNP measured in terms of current market prices is called:

A. nominal gnp
B. real gnp
C. both
D. none
Answer» A. nominal gnp
109.

In India, the current base year is:

A. 1980-81
B. 1993-94
C. 1999-2000
D. 2004-05
Answer» D. 2004-05
110.

Which of the following doest not include in the group?

A. gdp
B. gnp
C. gva
D. ndp
Answer» D. ndp
111.

The term “Classical Economics” was first used by:

A. j.m. keynes
B. adam smith
C. karl marx
D. david ricardo
Answer» C. karl marx
112.

Who is the leader of the Classical school?

A. thomas robert malthus
B. j.s. mill
C. david ricardo
D. adam smith.
Answer» D. adam smith.
113.

The core of classical economists is:

A. effective demand
B. employment
C. say’s law of market
D. socialism
Answer» C. say’s law of market
114.

‘Law of Market’ is attributed to:

A. j.s. mill
B. j.b. say
C. alfred marshall
D. a.c. pigou
Answer» B. j.b. say
115.

The Classicals adopted ---------policy:

A. governmental policy
B. laissez-faire
C. policy of restriction
D. none of these
Answer» B. laissez-faire
116.

According to Classicals, full employment is a:

A. rare phenomenon
B. normal phenomenon
C. abnormal phenomenon
D. none of these
Answer» B. normal phenomenon
117.

According to the Classical economists, general over production is:

A. possible
B. impossible
C. both
D. none
Answer» B. impossible
118.

According to the Classical economists, savings and investments are:

A. always unequal
B. always equal
C. never equal
D. sometimes equal
Answer» B. always equal
119.

Classical aggregate supply curve is:

A. perfectly elastic
B. perfectly inelastic
C. more elastic
D. unitary elastic
Answer» B. perfectly inelastic
120.

Pick the odd one from the following:

A. law of market
B. j.b. say
C. full employment
D. j.m. keynes
Answer» D. j.m. keynes
121.

According to the Classicals, investment is a function of:

A. saving
B. income
C. employment
D. rate of interest
Answer» D. rate of interest
122.

“Supply creates its own demand” is called:

A. law of supply
B. law of market
C. law of demand
D. law of elasticity
Answer» B. law of market
123.

Under the classical system, the equilibrium will be at:

A. under employment
B. full employment
C. voluntary employment
D. disguised unemployment
Answer» B. full employment
124.

When savings exceeds the demand for savings, the rate of interest will:

A. rise
B. fall
C. remain constant
D. none of these
Answer» B. fall
125.

Rate of interest will increase when the demand for saving is:

A. less than its supply
B. equal to its supply
C. more than its supply
D. less than or equal to its supply
Answer» C. more than its supply
126.

In the Classical system, the role of the government is:

A. the highest
B. not at all needed
C. limited
D. important
Answer» C. limited
127.

Equilibrium in the economy is settled by ---------, according to the Classicals.

A. centralized planning
B. price mechanism
C. both the planning and price mechanism
D. none of these
Answer» B. price mechanism
128.

Self interest, competition, profit motive are the features of:

A. socialism
B. capitalism
C. marxism
D. mixed economy
Answer» B. capitalism
129.

The Great Depression was during:

A. 1930s
B. 1920s
C. 1940s
D. 1830s
Answer» A. 1930s
130.

The equilibrium price is determined by the forces of:

A. supply only
B. demand only
C. both demand and supply
D. none of these
Answer» C. both demand and supply
131.

Temporary unemployment is -------------, according to the Classical economists:

A. impossible
B. permanent
C. possible
D. none of these
Answer» C. possible
132.

J.B. Say was a ---------------Economist.

A. swedish
B. german
C. french
D. american
Answer» C. french
133.

Pick the odd one out:

A. j.b. say
B. david ricardo
C. adam smith
D. j.m. keynes
Answer» D. j.m. keynes
134.

Author of the book ‘The General Theory of Employment, Interest and Money’:

A. karl marxq
B. j.b. say
C. j.m. keynes
D. adam smith
Answer» C. j.m. keynes
135.

‘The General Theory’, was published in :

A. 1776
B. 1890
C. 1936
D. 1950
Answer» C. 1936
136.

The branch of Economics that deals with economic aggregate is called:

A. micro economics
B. development economics
C. macro economics
D. welfare economics
Answer» C. macro economics
137.

The central theme of Keynesian Theory is:

A. laissez-faire
B. free trade
C. effective demand
D. self interest
Answer» C. effective demand
138.

Who repudiated Say’s law of market?

A. j.b. say
B. david ricardo
C. j.s. mill
D. j.m. keynes
Answer» D. j.m. keynes
139.

Effective demand is that demand when:

A. aggregate demand is greater than aggregate supply
B. aggregate demand is less than aggregate supply
C. aggregate demand is equal to aggregate supply
D. all of these
Answer» C. aggregate demand is equal to aggregate supply
140.

The concept of effective demand is associated with the name of:

A. marshall
B. keynes
C. krugman
D. adam smith
Answer» B. keynes
141.

The proportion between total income and total consumption is called:

A. average propensity to consume
B. average propensity to save
C. marginal propensity to consume
D. marginal propensity to save
Answer» A. average propensity to consume
142.

The proportion between incremental income and incremental consumption is called:

A. apc
B. aps
C. mpc
D. mps
Answer» C. mpc
143.

The proportion between total income and total saving is called:

A. apc
B. aps
C. mpc
D. mps
Answer» B. aps
144.

1- MPC is called:

A. apc
B. aps
C. mpc
D. mps
Answer» D. mps
145.

APC + APS is equal to:

A. 0
B. >0
C. 1
D. <0
Answer» C. 1
146.

Multiplier is obtained by:

A. 1 – mpc
B. 1/1- mps
C. 1/1- apc
D. 1/1-mpc
Answer» D. 1/1-mpc
147.

Exports minus imports is termed as:

A. net income
B. net imports
C. net exports
D. national income
Answer» C. net exports
148.

As income increases consumption also increases, but:

A. proportionately
B. more than proportionately
C. less than proportionately
D. equally
Answer» C. less than proportionately
149.

The expected return on investment is called:

A. marginal propensity to save
B. marginal propensity to consume
C. marginal revenue
D. marginal efficiency of investment
Answer» D. marginal efficiency of investment
150.

Marginal efficiency of investment curve is:

A. slopping downwards
B. slopping upwards
C. parallel to x axis
D. parallel to y axis
Answer» A. slopping downwards
151.

According to Keynes, unemployment is due to:

A. deficiency of capital
B. deficiency of labour
C. deficiency of education
D. deficiency in effective demand
Answer» D. deficiency in effective demand
152.

“In the long run, we are all dead”. Who said this?

A. keynes
B. adam smith
C. karl marx
D. david ricardo
Answer» A. keynes
153.

According to Keynes, investment is a function of:

A. rate of interest
B. rate of profit
C. rate of mei
D. mei and rate of interest
Answer» D. mei and rate of interest
154.

Keynes believed in :

A. full employment equilibrium
B. under employment equilibrium
C. both
D. none
Answer» B. under employment equilibrium
155.

According to Keynes, wages and prices are:

A. rigid
B. flexible
C. variable
D. automatic
Answer» A. rigid
156.

In Economics, 1930s is popularly known as the period of:

A. great battle
B. great depression
C. industrial revolution
D. great devide
Answer» B. great depression
157.

Keynes strongly argued for:

A. free trade
B. non-intervention of government
C. laissez-faire
D. governmental intervention
Answer» D. governmental intervention
158.

Consumption expenditure directly varies with:

A. savings
B. investment
C. disposable income
D. rate of interest
Answer» C. disposable income
159.

An important issue of macro economics is the determination of:

A. consumption
B. production
C. utility
D. income and employment
Answer» D. income and employment
160.

Pick the odd one:

A. aggregate demand
B. effective demand
C. j.m. keynes
D. law of market
Answer» D. law of market
161.

Which of the following items does not include in the group?

A. consumption
B. investment
C. rate of interest
D. net exports
Answer» C. rate of interest
162.

If marginal propensity to consume is 0.8, the value of multiplier will be:

A. 1
B. 2.5
C. 5
D. 2
Answer» C. 5
163.

Who is known as the father of Modern Economics?

A. adam smith
B. j.m.keynes
C. robinson
D. ricardo
Answer» A. adam smith
164.

Goods without which people can not live are called:

A. comforts
B. luxuries
C. necessaries
D. none
Answer» C. necessaries
165.

The problem of what to produce is a problem of:

A. distribution
B. technological choice
C. consumption
D. allocation of resources
Answer» D. allocation of resources
166.

Those things that possess both utility and scarcity are called:

A. economic goods
B. free goods
C. intermediate goods
D. luxuries
Answer» A. economic goods
167.

If a worker specializes in the production of a single good, it is called:

A. product based division of labour
B. process based division of labour
C. worker based division of labour
D. none of these
Answer» A. product based division of labour
168.

Goods produced for use in future productive process are called:

A. intermediate goods
B. final goods
C. consumer goods
D. capital goods
Answer» D. capital goods
169.

In a horizontal straight line demand curve, the price elasticity of demand is:

A. unity
B. infinity
C. zero
D. less than one
Answer» B. infinity
170.

Who wrote the article Laws of Returns Under Competitive Conditions?

A. joan robinson
B. e.h. chamberlin
C. a.c. pigou
D. p. sraffa
Answer» D. p. sraffa
171.

Increase in output less than proportional to increase in inputs is called:

A. increasing returns
B. constant returns
C. diminishing returns
D. marginal returns
Answer» C. diminishing returns
172.

A simplified representation of a real situation is called:

A. theory
B. hypotheses
C. evidence
D. economic model
Answer» D. economic model
173.

When marginal product reaches its maximum, what can be said of total product?

A. total product must be at its maximum
B. total product starts to decline even if marginal product is positive
C. total product is increasing if marginal product is still positive
D. total product levels off
Answer» C. total product is increasing if marginal product is still positive
174.

When a firm doubles its inputs and finds that its output has more than doubled, this is known as:

A. economies of scale.
B. constant returns to scale.
C. diseconomies of scale.
D. a violation of the law of diminishing returns.
Answer» A. economies of scale.
175.

When average product is at a maximum, marginal product is:

A. zero
B. increasing
C. equal to average product
D. greater than average product
Answer» C. equal to average product
176.

The want satisfying power of a commodity:

A. satisfaction
B. utility
C. value
D. marginal utility
Answer» B. utility
177.

Supply curve represents -------- relationship between quantity and price.

A. direct
B. inverse
C. either direct or inverse
D. none of the above
Answer» A. direct
178.

Laws of return shows ---------production function.

A. short-term
B. medium term
C. long term
D. annual
Answer» A. short-term
179.

In classical theory the level of employment is a function of:

A. price level
B. money wage rate
C. quantity of money
D. real wage rate
Answer» D. real wage rate
180.

Consumption of capital good in the process of production is called as:

A. capital consumption
B. depreciation
C. decay of capital
D. none of the above
Answer» B. depreciation
181.

Economic Laws are:

A. statement of tendencies
B. exact and predictable
C. definite
D. none
Answer» A. statement of tendencies
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