McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Arts in Economics (BA Economics) .
| 51. |
LM curve slopes— |
| A. | downward to the right |
| B. | upward to the right |
| C. | vertical |
| D. | horizontal. |
| Answer» B. upward to the right | |
| 52. |
The great depression was caused by what major event? |
| A. | an increase in federal spending |
| B. | the stock market crash |
| C. | automobile workers going on strike |
| D. | president hoover announcing a war |
| Answer» B. the stock market crash | |
| 53. |
Great Depression was between ……and ……. |
| A. | 1929,1939 |
| B. | 1930,1950 |
| C. | 1928,1930 |
| D. | 1930,1940 |
| Answer» D. 1930,1940 | |
| 54. |
The financial crisis of 2007-08 originated in the following country. |
| A. | us |
| B. | uk |
| C. | russia |
| D. | india |
| Answer» A. us | |
| 55. |
During the financial crisis of 2007-08, which financial instruments commonly came to be called “Toxic Assets”? |
| A. | treasury bill |
| B. | mortgaged backed securities |
| C. | s&p stokes |
| D. | government bonds |
| Answer» B. mortgaged backed securities | |
| 56. |
The period of economic downturn that ensued after the financial crisis of 2007-08 and affected many countries world-wide is called: |
| A. | the great depression |
| B. | the great recession |
| C. | black friday |
| D. | great collapse |
| Answer» B. the great recession | |
| 57. |
Fiscal policy in India is formulated by |
| A. | reserve bank of india |
| B. | planning commission |
| C. | finance ministry |
| D. | securities and exchange board of india |
| Answer» C. finance ministry | |
| 58. |
Economic Survey in India is published by the |
| A. | reserve bank of india |
| B. | ministry of finance, government of india |
| C. | niti aayog |
| D. | ministry of industries, government of india |
| Answer» C. niti aayog | |
| 59. |
Which one of the following is the largest item of expenditure of the Government of India on revenue account? |
| A. | defense |
| B. | pensions |
| C. | subsidies |
| D. | interest payments |
| Answer» D. interest payments | |
| 60. |
The lowest level of economic activity is called |
| A. | contraction |
| B. | trough |
| C. | recovery |
| D. | none of the above |
| Answer» B. trough | |
| 61. |
During depression _ industry suffer from excess production capacity. |
| A. | capital goods |
| B. | consumer durable goods |
| C. | non-durable goods |
| D. | both ‘a’ and ‘b’ |
| Answer» A. capital goods | |
| 62. |
The term business cycle refers to – |
| A. | fluctuations in aggregate economic activity over time. |
| B. | ups and down in the production of goods |
| C. | increasing unemployment |
| D. | declining savings |
| Answer» A. fluctuations in aggregate economic activity over time. | |
| 63. |
Expansion phase all but one of the following characteristics. |
| A. | increase in national output |
| B. | increase in consumer spending |
| C. | excess production capacity of industries |
| D. | expansion of bank credit |
| Answer» C. excess production capacity of industries | |
| 64. |
Which one of the following is not the characteristic of business cycle? |
| A. | they are recurrent |
| B. | they are not at regular intervals |
| C. | they have uniform causes |
| D. | all the above |
| Answer» C. they have uniform causes | |
| 65. |
The turning points of the business cycle are |
| A. | expansion and peak |
| B. | peak and contraction |
| C. | contraction and trough |
| D. | peak and trough |
| Answer» D. peak and trough | |
| 66. |
refers to the top or the highest point of business cycle. |
| A. | expansion |
| B. | peak |
| C. | expansion and peak |
| D. | none of the above |
| Answer» B. peak | |
| 67. |
Involuntary unemployment is almost zero in the phase of business cycle. |
| A. | expansion |
| B. | contraction |
| C. | trough |
| D. | depression |
| Answer» A. expansion | |
| 68. |
The economy is said to be overheated at the _ phase of business cycle. |
| A. | expansion |
| B. | peak |
| C. | contraction |
| D. | depression |
| Answer» B. peak | |
| 69. |
Cost of living increases when business cycle is |
| A. | expanding |
| B. | contracting |
| C. | at peak |
| D. | at lowest point |
| Answer» C. at peak | |
| 70. |
There is large scale of involuntary unemployment in the phase of business cycle. |
| A. | expansion |
| B. | peak |
| C. | contraction |
| D. | none of the above |
| Answer» C. contraction | |
| 71. |
Fall in the level of investments, fall in production, fall in employment, fall stock prices, etc. are found during phase of business cycle. |
| A. | expansion |
| B. | boom |
| C. | peak |
| D. | contraction |
| Answer» D. contraction | |
| 72. |
All but one are the endogenous factors of business cycle |
| A. | war |
| B. | changes in government spending |
| C. | money supply |
| D. | fluctuations in investments |
| Answer» A. war | |
| 73. |
When prices are falling continuously, the phenomenon is called: |
| A. | inflation |
| B. | stagflation |
| C. | deflation |
| D. | reflation |
| Answer» C. deflation | |
| 74. |
When too much money chases too few goods, the resulting Inflation is called: |
| A. | deflation |
| B. | demand-pull inflation |
| C. | cost push inflation |
| D. | stagflation |
| Answer» B. demand-pull inflation | |
| 75. |
Cause of Inflation in India is / are: |
| A. | deficit financing |
| B. | erratic agriculture growth |
| C. | inadequate rise in industrial production |
| D. | all of the above |
| Answer» D. all of the above | |
| 76. |
Stagflation means: |
| A. | inflation with stagnation |
| B. | recession with stagnation |
| C. | inflation galloping like stage |
| D. | inflation & increasing output |
| Answer» A. inflation with stagnation | |
| 77. |
Which is the most effective quantitative method to control inflation in the economy? |
| A. | bank rate policy |
| B. | selective credit control |
| C. | cash reserve ratio |
| D. | both (a) and (b) |
| Answer» C. cash reserve ratio | |
| 78. |
Which measures are followed by the government for handling inflation? |
| A. | monetary measures |
| B. | fiscal measures |
| C. | controlling investments |
| D. | all of these |
| Answer» D. all of these | |
| 79. |
Inflation is measured on the basis of: |
| A. | wholesale price index |
| B. | consumer price index |
| C. | marshall’s index |
| D. | all of these |
| Answer» B. consumer price index | |
| 80. |
When price increases due to increase in factor prices it is . |
| A. | demand pull inflation |
| B. | cost pull inflation |
| C. | stagflation |
| D. | none of the above. |
| Answer» B. cost pull inflation | |
| 81. |
According to the Phillips curve unemployment will return to the natural rate when ? |
| A. | nominal wages are equal to expected wages |
| B. | real wages are back at equilibrium level |
| C. | nominal wages are growing faster than inflation |
| D. | inflation is higher than the growth of nominal wages |
| Answer» A. nominal wages are equal to expected wages | |
| 82. |
Demand pull inflation may be caused by ? |
| A. | an increase in costs |
| B. | a reduction in interest rate |
| C. | a reduction in government spending |
| D. | an outward shift in aggregate supply |
| Answer» B. a reduction in interest rate | |
| 83. |
The economist who proposed that, “Inflation is always and everywhere a monetary phenomenon” was |
| A. | john maynard keynes. |
| B. | john r. hicks. |
| C. | milton friedman. |
| D. | franco modigliani. |
| Answer» C. milton friedman. | |
| 84. |
Inflation occurs whenever |
| A. | the price level rises. |
| B. | the money supply increases. |
| C. | the price level rises continuously over a period of time. |
| D. | the price level falls continuously over a period of time. |
| Answer» C. the price level rises continuously over a period of time. | |
| 85. |
An unrealistically low unemployment target will most likely result in |
| A. | inflation. |
| B. | an unemployment rate falling below the natural rate. |
| C. | excessive monetary growth. |
| D. | all of the above. |
| Answer» D. all of the above. | |
| 86. |
Governments may pursue inflationary monetary policies |
| A. | to promote high employment. |
| B. | to accommodate demands of workers for higher wages. |
| C. | to finance a persistent budget deficit. |
| D. | for all the above reasons. |
| Answer» D. for all the above reasons. | |
| 87. |
Which of the following is least likely to lead to inflationary monetary policy? |
| A. | rising unemployment |
| B. | expanding federal budget deficits |
| C. | declining oil prices |
| D. | conflict in the middle east |
| Answer» C. declining oil prices | |
| 88. |
Economists from which of the following schools of thought are most likely to favor activist government policies? |
| A. | keynesian |
| B. | monetarist |
| C. | classical |
| D. | all of the above |
| Answer» A. keynesian | |
| 89. |
According to the monetarists, inflation is caused by |
| A. | supply shocks. |
| B. | expansionary fiscal policies. |
| C. | expansionary monetary policies. |
| D. | rising prices. |
| Answer» C. expansionary monetary policies. | |
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