McqMate
101. |
In classical theory which of the following is found in the economy: |
A. | Unemployment |
B. | Involuntary unemployment |
C. | Less than full employment |
D. | Full employment |
Answer» D. Full employment |
102. |
In MV=PT, if M doubles and V and T remain constant, then P will: |
A. | Double |
B. | 1/2 |
C. | 1 |
D. | 4 |
Answer» A. Double |
103. |
Pigou’s version of Cambridge equation is: |
A. | M = KP/Y |
B. | P= KR/M |
C. | MV = PT |
D. | MV = MI VI |
Answer» B. P= KR/M |
104. |
The quantity theory of money was restated by: |
A. | Alfred Marshall |
B. | Milton Friedman |
C. | Irving Fisher |
D. | J.M. .Keynes |
Answer» B. Milton Friedman |
105. |
The law which states that supply creates its own demand and overproduction is impossible is known as: |
A. | The law of supply |
B. | Say’s law of market |
C. | Law of demand |
D. | Law of macro economics |
Answer» B. Say’s law of market |
106. |
Wages and prices do not adjust quickly to restore general equilibrium is a property of |
A. | Classical economics |
B. | Keynesian economics |
C. | Monetary economics |
D. | Supply side economics |
Answer» B. Keynesian economics |
107. |
Classicals treated money as a: |
A. | Medium of exchange |
B. | Store of value |
C. | Both |
D. | None |
Answer» A. Medium of exchange |
108. |
When there is an increase in the autonomous money supply, ceteris paribus, LM shifts: |
A. | Leftward |
B. | Rightward |
C. | No shift |
D. | None |
Answer» B. Rightward |
109. |
An Economic model is a statement of relationship among economic ------ |
A. | Variables |
B. | Phenomena |
C. | Development |
D. | None of these |
Answer» A. Variables |
110. |
LM curve shows the equilibrium condition in ---------- market |
A. | Goods market |
B. | Product market |
C. | Money market |
D. | None of these |
Answer» C. Money market |
111. |
Supply creates its own demand is the Basis of: |
A. | Classical economics |
B. | Keynesian economics |
C. | Monetarism |
D. | None of these |
Answer» A. Classical economics |
112. |
The simplest ISLM model consists of: |
A. | Two markets |
B. | Three markets |
C. | Four markets |
D. | Five markets |
Answer» A. Two markets |
113. |
The equilibrium in the product market is represented by which curve? |
A. | IS |
B. | LM |
C. | Demand |
D. | Supply curve |
Answer» A. IS |
114. |
The IS curve has a ------slope |
A. | Positive |
B. | Negative |
C. | Zero |
D. | None of these |
Answer» B. Negative |
115. |
The LM curve has a ----- slope |
A. | Positive |
B. | Negative |
C. | Zero |
D. | None of these |
Answer» A. Positive |
116. |
ISLM model was developed by: |
A. | Hicks |
B. | Keynes |
C. | Friedman |
D. | None of these |
Answer» A. Hicks |
117. |
The perfectly elastic segment of the LM curve is: |
A. | Keynesian range |
B. | Classical range |
C. | Intermediate range |
D. | None of these |
Answer» A. Keynesian range |
118. |
Which policy is effective in the Classical range? |
A. | Monetary policy |
B. | Fiscal policy |
C. | Incomes policy |
D. | None of these |
Answer» A. Monetary policy |
119. |
Which policy is effective in the Keynesian range? |
A. | Monetary policy |
B. | Fiscal policy |
C. | Incomes policy |
D. | None of these |
Answer» B. Fiscal policy |
120. |
Which policy is effective in the intermediate range? |
A. | Monetary policy |
B. | Fiscal policy |
C. | Both policies |
D. | None of these |
Answer» C. Both policies |
121. |
IS-LM model was developed by: |
A. | Keynes |
B. | Walras |
C. | J.R.Hicks |
D. | Don-Patinkin |
Answer» C. J.R.Hicks |
122. |
Frictional unemployment exists: |
A. | When there is a decrease in real GDP |
B. | Because it takes time to find a job when one is first entering the labour force |
C. | As a result of technological change |
D. | When an individual retires |
Answer» B. Because it takes time to find a job when one is first entering the labour force |
123. |
The natural rate of unemployment equals the sum of those who are: |
A. | Frictionally and structurally unemployed |
B. | Frictionally and cyclically unemployed |
C. | Structurally and cyclically unemployed |
D. | Frictionally structurally and cyclically unemployed |
Answer» A. Frictionally and structurally unemployed |
124. |
The marginal productivity of labour: |
A. | Increases when the price of the good sold increases, ceteris paribus |
B. | Decreases when there is an adverse supply shock, ceteris paribus |
C. | Increase when more workers are hired, ceteris paribus |
D. | Decreases when there is an increase in the quantity of capital, ceteris paribus |
Answer» B. Decreases when there is an adverse supply shock, ceteris paribus |
125. |
When saving is greater than investment in a two-sector model, |
A. | Output should increase |
B. | Output should decrease |
C. | Output should not change |
D. | None of these |
Answer» B. Output should decrease |
126. |
When output exceeds spending: |
A. | There is unsold output, and level of output will fall |
B. | There is unsold output, and level of output will rise |
C. | There is unsold output, and level of spending will rise |
D. | There is no unsold output since the level of spending will rise |
Answer» A. There is unsold output, and level of output will fall |
127. |
When investment is negatively related to the rate of interest, equilibrium output in the goods market: |
A. | Is unrelated to the rate of interest |
B. | Is inversely related to the rate of interest |
C. | Is positively related to the rate of interest |
D. | Falls as the rate of interest decreases |
Answer» B. Is inversely related to the rate of interest |
128. |
Simultaneous equilibrium in the money (LM) and goods (IS) market exists: |
A. | At an unlimited number of output levels and rates of interest |
B. | At only one output level and rate of interest |
C. | At an unlimited number of output levels and only one rate of interest |
D. | At only one output level and an unlimited number of rates of interest |
Answer» B. At only one output level and rate of interest |
129. |
In which of the following situations will an increase in the money supply have no effect upon output? |
A. | LM is steeply sloped and IS is steeply sloped |
B. | LM is vertical and IS is steeply sloped |
C. | LM is steeply sloped and IS is vertical |
D. | LM is relatively flat as is IS |
Answer» C. LM is steeply sloped and IS is vertical |
130. |
Policy Neutrality is the main proposition of: |
A. | Supply Side Economics. |
B. | Keynesian Economics |
C. | Monetarism |
D. | Rational expectations hypothesis |
Answer» D. Rational expectations hypothesis |
131. |
Who invented the General Equilibrium analysis? |
A. | L. Walras. |
B. | W. Leontief |
C. | J.M.Keynes. |
D. | None of these. |
Answer» A. L. Walras. |
132. |
Employment equilibrium in the Classical theory is achieved through: |
A. | Wage-Price flexibility. |
B. | Changes in aggregate demand |
C. | Changes in aggregate supply |
D. | None of these. |
Answer» A. Wage-Price flexibility. |
133. |
Market does not clear is a proposition of: |
A. | Neoclassical theory. |
B. | Keynesian Economics |
C. | Monetarism |
D. | Rational expectations |
Answer» B. Keynesian Economics |
134. |
The interest rate paid on bonds is known as: |
A. | Call rate |
B. | Coupon rate |
C. | Repo rate |
D. | Bank rate |
Answer» B. Coupon rate |
135. |
The monetary policy is completely ineffective when the LM curve is: |
A. | Vertical . |
B. | Horizontal. |
C. | Upward sloping. |
D. | Downward sloping |
Answer» B. Horizontal. |
136. |
Changes in the subjective or objective factors |
A. | Never affect consumption function |
B. | Always cause downward shift in consumption function |
C. | Always cause upward shift in consumption function |
D. | They cause upward or downward shifts in consumption function |
Answer» D. They cause upward or downward shifts in consumption function |
137. |
Saving is a function of |
A. | Export |
B. | Import |
C. | Investment |
D. | Income |
Answer» D. Income |
138. |
Entrepreneurs will have no tendency to expand or contract output and employment when |
A. | AD>AS |
B. | AD<AS |
C. | AD=AS |
D. | None of the above |
Answer» C. AD=AS |
139. |
The slope of the consumption function is called |
A. | MPC |
B. | MPS |
C. | APC |
D. | APS |
Answer» A. MPC |
140. |
The concept of effective demand is associated with the name of |
A. | Marshall |
B. | Keynes |
C. | Krugman |
D. | Say |
Answer» B. Keynes |
141. |
In a closed economy, the value of multiplier , when MPC is 0.90 |
A. | 25 |
B. | 90 |
C. | 10 |
D. | 9 |
Answer» C. 10 |
142. |
Income is a ------- variable |
A. | Flow |
B. | Discontinuous |
C. | Stock |
D. | None of the above |
Answer» A. Flow |
143. |
Ratio of consumption expenditure to any particular level of income |
A. | MPS |
B. | APS |
C. | APC |
D. | MPC |
Answer» C. APC |
144. |
Psychological law of consumption states that the value of MPC is lies between zero and |
A. | 1 |
B. | 2 |
C. | 3 |
D. | 4 |
Answer» A. 1 |
145. |
Net investment is also known as |
A. | Depreciation |
B. | Induced investment |
C. | Autonomous investment |
D. | Capital formation |
Answer» D. Capital formation |
146. |
In the saving function S = -a + (1-b)Y, the term ‘b’ denotes |
A. | Saving |
B. | MPC |
C. | MPS |
D. | APS |
Answer» B. MPC |
147. |
Who propounded Psychological law of consumption |
A. | Adam Smith |
B. | Ricardo |
C. | Keynes |
D. | Pigou |
Answer» C. Keynes |
148. |
When MPS = 0.2, MPC will be |
A. | 0.8 |
B. | 0.2 |
C. | 1.2 |
D. | 20 |
Answer» A. 0.8 |
149. |
In the linear consumption function C = a + bY, coefficient ‘a’ denotes |
A. | MPC |
B. | APC |
C. | Autonomous consumption |
D. | Induced consumption |
Answer» C. Autonomous consumption |
150. |
According to Keynes, rising aggregate income is always associated with |
A. | Higher saving rate |
B. | Higher import |
C. | Lower export |
D. | Low production |
Answer» A. Higher saving rate |
151. |
When MPC = 0.5, the value of multiplier is |
A. | 5 |
B. | 0.5 |
C. | 2 |
D. | 4 |
Answer» C. 2 |
152. |
Who postulated the law Supply creates its own demand |
A. | Keynes |
B. | J B say |
C. | Marshall |
D. | Pigou |
Answer» B. J B say |
153. |
Autonomous investment is |
A. | Income inelastic |
B. | Instable |
C. | Interest elastic |
D. | Income elastic |
Answer» A. Income inelastic |
154. |
MEC for a capital good was found out to be 10% and the market rate of interest is 9%, then the investment is |
A. | Not profitable |
B. | Profitable |
C. | Breakeven |
D. | Cannot say |
Answer» B. Profitable |
155. |
In the Keynesian two sector economy, AD>AS, then |
A. | S=I |
B. | S>I |
C. | S<I |
D. | S=0 |
Answer» C. S<I |
156. |
Value of MPC is |
A. | >1 |
B. | <1 |
C. | 0 |
D. | 0≤ MPC ≥1 |
Answer» D. 0≤ MPC ≥1 |
157. |
Schedule that expresses relationship between rate of interest and corresponding amount of investment |
A. | MEI |
B. | MEC |
C. | Effective Demand |
D. | Aggregate Demand |
Answer» A. MEI |
158. |
Net investment is |
A. | Value of gross minus subsidies |
B. | Investment after providing for depreciation |
C. | Value of gross output before providing for subsidies |
D. | None of the above |
Answer» B. Investment after providing for depreciation |
159. |
MEC is directly related to |
A. | Prospective yield |
B. | Supply price |
C. | Rate of interest |
D. | All of the above |
Answer» A. Prospective yield |
160. |
According to Keynes the most important determinant of consumption |
A. | Rate of interest |
B. | Saving |
C. | Income |
D. | Investment |
Answer» C. Income |
161. |
In the Keynesian two sector economy, AD<AS, then |
A. | S=I |
B. | S>I |
C. | S<I |
D. | S=0 |
Answer» B. S>I |
162. |
In the equation C = 60 + 0.6 Y, MPC is |
A. | 60 |
B. | 0.6 |
C. | 0 |
D. | 1 |
Answer» B. 0.6 |
163. |
Keynes assumed the presence of --------- economy for the fundamental law of consumption |
A. | Capitalistic |
B. | Socialistic |
C. | Planned |
D. | None of the above |
Answer» A. Capitalistic |
164. |
According to Keynes the most important determinant of investment |
A. | MEC |
B. | Effective demand |
C. | Aggregate demand |
D. | Rate of interest |
Answer» A. MEC |
165. |
When disposable income rises from Rs 500 to Rs 600 and consumption expenditure changes from Rs 470 to Rs 560, MPC will be equal to |
A. | 900 |
B. | 100 |
C. | 0.9 |
D. | 1 |
Answer» C. 0.9 |
166. |
In a two sector economy, aggregate demand is equal to |
A. | C+I |
B. | C+S |
C. | S+I |
D. | All of the above |
Answer» A. C+I |
167. |
In Keynesian terminology, investment means: |
A. | Financial investment |
B. | Real investment |
C. | Induced investment |
D. | None of the above |
Answer» B. Real investment |
168. |
Rate of change in savings to change in income: |
A. | APS |
B. | APC |
C. | MPS |
D. | MPC |
Answer» C. MPS |
169. |
Keynesian economics is also known as: |
A. | Supply side economics |
B. | Monetary economics |
C. | Rational expectations |
D. | Depression economics |
Answer» D. Depression economics |
170. |
Which of the following can cause shifts in consumption function: |
A. | Psychological attitude |
B. | Social practices |
C. | Business motives |
D. | Changes in price level |
Answer» D. Changes in price level |
171. |
APC is determined by the following equation: |
A. | C/Y |
B. | S/Y |
C. | ∆C/∆Y |
D. | ∆S/∆Y |
Answer» A. C/Y |
172. |
In the Keynesian two sector model, when AD = AS, then: |
A. | S<I |
B. | S>I |
C. | S=I |
D. | I=0 |
Answer» C. S=I |
173. |
Which of the following is not correct: |
A. | MPC declines as income increases |
B. | MPC is positive but less than one |
C. | MPS is always positive |
D. | All the above |
Answer» C. MPS is always positive |
174. |
According to Keynes, saving is: |
A. | Private virtue but not social virtue |
B. | Private and social virtue |
C. | Is neither private virtue nor social virtue |
D. | Is either social virtue or private virtue |
Answer» A. Private virtue but not social virtue |
175. |
MEC is inversely related to: |
A. | Prospective yield |
B. | Supply price |
C. | Investment |
D. | Rate of interest |
Answer» A. Prospective yield |
176. |
Keynes considered subjective and objective factors: |
A. | Important determinants of consumption |
B. | Unimportant determinants of consumption |
C. | Determinants of investment |
D. | Determinants of business’s willingness to pay |
Answer» B. Unimportant determinants of consumption |
177. |
The sum of marginal propensity to consume plus marginal propensity to save must equal to: |
A. | 0 |
B. | 1 |
C. | 100 |
D. | 1000 |
Answer» B. 1 |
178. |
Keynesian economics is: |
A. | Macro |
B. | Micro |
C. | Both |
D. | None |
Answer» A. Macro |
179. |
The MEC increases when: |
A. | Capital stock increases |
B. | Capital stock decreases |
C. | Capital remains constant |
D. | None of the above |
Answer» B. Capital stock decreases |
180. |
Which of the following is correct? |
A. | 1+MPS = MPC |
B. | 1- MPC = MPS |
C. | MPC + MPS >1 |
D. | MPC+ MPS<1 |
Answer» B. 1- MPC = MPS |
181. |
Starting point of Keynesian economics is: |
A. | Effective demand |
B. | Individual demand |
C. | Aggregate demand |
D. | Market demand |
Answer» A. Effective demand |
182. |
Keynesian three sector model consist of: |
A. | Business sector, service sector, external sector |
B. | Households, business, government |
C. | Government sector, open sector, service sector |
D. | Government sector, private sector, open sector |
Answer» B. Households, business, government |
183. |
A substantial increase in the rate of interest can cause: |
A. | Increase in savings |
B. | Reduce propensity to consume |
C. | All the above |
D. | None of the above |
Answer» C. All the above |
184. |
Functional relationship between saving and disposable income is: |
A. | Saving function |
B. | Income function |
C. | Consumption function |
D. | Investment function |
Answer» A. Saving function |
185. |
As the value of MPC increases, the value of multiplier: |
A. | Decreases |
B. | Increases |
C. | Constant |
D. | Cannot say |
Answer» B. Increases |
186. |
Who among the following pioneered the first real estimate of national income? |
A. | Adam Smith |
B. | David Ricardo |
C. | William Petty |
D. | None of the above |
Answer» C. William Petty |
187. |
Who argued that national income is simply equal to “net product of agriculture”? |
A. | Mercantilists |
B. | Physiocrats |
C. | Classical Economists |
D. | Neo Classical Economists |
Answer» B. Physiocrats |
188. |
Who argued that “Everything that is produced in the course of a year, every service rendered, every fresh utility brought about is a part of the national wealth.”? |
A. | JS Mill |
B. | Stanley Jevons |
C. | Alfred Marshall |
D. | Robert Malthus |
Answer» C. Alfred Marshall |
189. |
Who made the first major attempt to estimate national income in a somewhat comprehensive manner? |
A. | Robert Fisher |
B. | John Maynard Keynes |
C. | Simon Kuznets |
D. | Arthur Pigou |
Answer» C. Simon Kuznets |
190. |
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 |
191. |
Which one of the following is roughly equal to national income? |
A. | GDP |
B. | NNP |
C. | GNP |
D. | SDP |
Answer» B. NNP |
192. |
Which one of the following includes ‘income of residents’? |
A. | GDP |
B. | NNP |
C. | SDP |
D. | None of the above |
Answer» B. NNP |
193. |
Remittances made by NRIs to India in the context of national income accounting is called as |
A. | Remittance Income |
B. | NRI Income |
C. | Factor Payments |
D. | All of the above |
Answer» C. Factor Payments |
194. |
Who first introduced the concept of circular flow of income? |
A. | William Petty |
B. | Adam Smith |
C. | David Ricardo |
D. | Fancois Quesnay |
Answer» D. Fancois Quesnay |
195. |
Which one in the following is a stock variable? |
A. | Income |
B. | Investment |
C. | Capital |
D. | Fiscal Deficit |
Answer» C. Capital |
196. |
Which one in the following is a flow variable? |
A. | Debt |
B. | Wealth |
C. | Unemployment |
D. | GDP |
Answer» D. GDP |
197. |
Why do not the sale or purchase of used goods are not included in the GDP? |
A. | Used goods have only limited life |
B. | Used goods are not fresh production |
C. | Used goods are included in the previous GDP calculations |
D. | All the above |
Answer» C. Used goods are included in the previous GDP calculations |
198. |
Inventories are unsold goods produced by a firm, then why do they are included in GDP? |
A. | Inventories represent value |
B. | Inventories add to the stock of the firm |
C. | They are purchases by the firm itself |
D. | All the above |
Answer» C. They are purchases by the firm itself |
199. |
The value of ‘intermediate goods’ are excluded from GDP calculation because: |
A. | It will increase the GDP unduly |
B. | It results in multiple counting of same value |
C. | Intermediate goods are not important |
D. | All the above |
Answer» B. It results in multiple counting of same value |
200. |
Value added at each stage of production means: |
A. | Value of output minus value of input |
B. | Total value added by that stage |
C. | Total value produced at that stage |
D. | All of the above |
Answer» A. Value of output minus value of input |
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