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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