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McqMate
Chapters
1. |
Excess demand for money, according to Say’s law in the Economy: |
A. | Is greater |
B. | Is very less |
C. | Is equal to zero |
D. | There is no relationship between excess demand for money and Say’s Law |
Answer» D. There is no relationship between excess demand for money and Say’s Law |
2. |
Which of the following is not an assumption of classical theory? |
A. | Price flexibility |
B. | Unemployment |
C. | Say’s law |
D. | Neutrality of money |
Answer» B. Unemployment |
3. |
In classical theory the equality between saving and investment is brought about by: |
A. | Rate of interest |
B. | Income |
C. | Consumption |
D. | Multiplier |
Answer» A. Rate of interest |
4. |
The normal condition of a capitalist economy in classical theory is: |
A. | Underemployment |
B. | Full employment |
C. | General unemployment |
D. | Frictional unemployment |
Answer» B. Full employment |
5. |
In classical theory of employment, there is the possibility of: |
A. | Voluntary unemployment |
B. | No unemployment |
C. | Involuntary unemployment |
D. | Disguised unemployment |
Answer» A. Voluntary unemployment |
6. |
“Supply creates its own demand “is a law of: |
A. | Investment |
B. | Inflation |
C. | Consumption |
D. | Market |
Answer» D. Market |
7. |
According to classical economists, variations in savings are due to: |
A. | Level of investment |
B. | Rate of interest |
C. | Level of employment |
D. | None of the above |
Answer» B. Rate of interest |
8. |
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 |
9. |
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 |
10. |
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 |
11. |
Saving is a function of |
A. | Export |
B. | Import |
C. | Investment |
D. | Income |
Answer» D. Income |
12. |
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 |
13. |
The slope of the consumption function is called |
A. | MPC |
B. | MPS |
C. | APC |
D. | APS |
Answer» A. MPC |
14. |
The concept of effective demand is associated with the name of |
A. | Marshall |
B. | Keynes |
C. | Krugman |
D. | Say |
Answer» B. Keynes |
15. |
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 |
16. |
Net investment is also known as |
A. | Depreciation |
B. | Induced investment |
C. | Autonomous investment |
D. | Capital formation |
Answer» D. Capital formation |
17. |
In the saving function S = -a + 1-b(Y), the term ‘b’ denotes |
A. | Saving |
B. | MPC |
C. | MPS |
D. | APS |
Answer» B. MPC |
18. |
Who propounded Psychological law of consumption |
A. | Adam Smith |
B. | Ricardo |
C. | Keynes |
D. | Pigou |
Answer» C. Keynes |
19. |
When MPS = 0.2, MPC will be |
A. | 0.8 |
B. | 0.2 |
C. | 1.2 |
D. | 20 |
Answer» A. 0.8 |
20. |
In the linear consumption function C = a + b(Y), coefficient ‘a’ denotes |
A. | MPC |
B. | APC |
C. | Autonomous consumption |
D. | Induced consumption |
Answer» C. Autonomous consumption |
21. |
In the equation C = 60 + 0.6 Y, MPC is |
A. | 60 |
B. | 0.6 |
C. | 0 |
D. | 1 |
Answer» B. 0.6 |
22. |
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 |
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