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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. |
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 |
12. |
The slope of the consumption function is called |
A. | mpc |
B. | mps |
C. | apc |
D. | aps |
Answer» A. mpc |
13. |
The concept of effective demand is associated with the name of |
A. | marshall |
B. | keynes |
C. | krugman |
D. | say |
Answer» B. keynes |
14. |
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 |
15. |
Net investment is also known as |
A. | depreciation |
B. | induced investment |
C. | autonomous investment |
D. | capital formation |
Answer» D. capital formation |
16. |
In the saving function S = -a + (b)Y, the term ‘b’ denotes |
A. | saving |
B. | mpc |
C. | mps |
D. | aps |
Answer» B. mpc |
17. |
Who propounded Psychological law of consumption |
A. | adam smith |
B. | ricardo |
C. | keynes |
D. | pigou |
Answer» C. keynes |
18. |
When MPS = 0.2, MPC will be |
A. | 0.8 |
B. | 0.2 |
C. | 1.2 |
D. | 20 |
Answer» A. 0.8 |
19. |
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 |
20. |
In the equation C = 60 + 0.6 Y, MPC is |
A. | 60 |
B. | 0.6 |
C. | 0 |
D. | 1 |
Answer» B. 0.6 |
21. |
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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