McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) .
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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