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) .
| 151. |
When MPC = 0.5, the value of multiplier is |
| A. | 5 |
| B. | 0.5 |
| C. | 2 |
| D. | 4 |
| Answer» C. 2 | |
| 152. |
Who postulated the law Supply creates its own demand |
| A. | Keynes |
| B. | J B say |
| C. | Marshall |
| D. | Pigou |
| Answer» B. J B say | |
| 153. |
Autonomous investment is |
| A. | Income inelastic |
| B. | Instable |
| C. | Interest elastic |
| D. | Income elastic |
| Answer» A. Income inelastic | |
| 154. |
MEC for a capital good was found out to be 10% and the market rate of interest is 9%, then the investment is |
| A. | Not profitable |
| B. | Profitable |
| C. | Breakeven |
| D. | Cannot say |
| Answer» B. Profitable | |
| 155. |
In the Keynesian two sector economy, AD>AS, then |
| A. | S=I |
| B. | S>I |
| C. | S<I |
| D. | S=0 |
| Answer» C. S<I | |
| 156. |
Value of MPC is |
| A. | >1 |
| B. | <1 |
| C. | 0 |
| D. | 0≤ MPC ≥1 |
| Answer» D. 0≤ MPC ≥1 | |
| 157. |
Schedule that expresses relationship between rate of interest and corresponding amount of investment |
| A. | MEI |
| B. | MEC |
| C. | Effective Demand |
| D. | Aggregate Demand |
| Answer» A. MEI | |
| 158. |
Net investment is |
| A. | Value of gross minus subsidies |
| B. | Investment after providing for depreciation |
| C. | Value of gross output before providing for subsidies |
| D. | None of the above |
| Answer» B. Investment after providing for depreciation | |
| 159. |
MEC is directly related to |
| A. | Prospective yield |
| B. | Supply price |
| C. | Rate of interest |
| D. | All of the above |
| Answer» A. Prospective yield | |
| 160. |
According to Keynes the most important determinant of consumption |
| A. | Rate of interest |
| B. | Saving |
| C. | Income |
| D. | Investment |
| Answer» C. Income | |
| 161. |
In the Keynesian two sector economy, AD<AS, then |
| A. | S=I |
| B. | S>I |
| C. | S<I |
| D. | S=0 |
| Answer» B. S>I | |
| 162. |
In the equation C = 60 + 0.6 Y, MPC is |
| A. | 60 |
| B. | 0.6 |
| C. | 0 |
| D. | 1 |
| Answer» B. 0.6 | |
| 163. |
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 | |
| 164. |
According to Keynes the most important determinant of investment |
| A. | MEC |
| B. | Effective demand |
| C. | Aggregate demand |
| D. | Rate of interest |
| Answer» A. MEC | |
| 165. |
When disposable income rises from Rs 500 to Rs 600 and consumption expenditure changes from Rs 470 to Rs 560, MPC will be equal to |
| A. | 900 |
| B. | 100 |
| C. | 0.9 |
| D. | 1 |
| Answer» C. 0.9 | |
| 166. |
In a two sector economy, aggregate demand is equal to |
| A. | C+I |
| B. | C+S |
| C. | S+I |
| D. | All of the above |
| Answer» A. C+I | |
| 167. |
In Keynesian terminology, investment means: |
| A. | Financial investment |
| B. | Real investment |
| C. | Induced investment |
| D. | None of the above |
| Answer» B. Real investment | |
| 168. |
Rate of change in savings to change in income: |
| A. | APS |
| B. | APC |
| C. | MPS |
| D. | MPC |
| Answer» C. MPS | |
| 169. |
Keynesian economics is also known as: |
| A. | Supply side economics |
| B. | Monetary economics |
| C. | Rational expectations |
| D. | Depression economics |
| Answer» D. Depression economics | |
| 170. |
Which of the following can cause shifts in consumption function: |
| A. | Psychological attitude |
| B. | Social practices |
| C. | Business motives |
| D. | Changes in price level |
| Answer» D. Changes in price level | |
| 171. |
APC is determined by the following equation: |
| A. | C/Y |
| B. | S/Y |
| C. | ∆C/∆Y |
| D. | ∆S/∆Y |
| Answer» A. C/Y | |
| 172. |
In the Keynesian two sector model, when AD = AS, then: |
| A. | S<I |
| B. | S>I |
| C. | S=I |
| D. | I=0 |
| Answer» C. S=I | |
| 173. |
Which of the following is not correct: |
| A. | MPC declines as income increases |
| B. | MPC is positive but less than one |
| C. | MPS is always positive |
| D. | All the above |
| Answer» C. MPS is always positive | |
| 174. |
According to Keynes, saving is: |
| A. | Private virtue but not social virtue |
| B. | Private and social virtue |
| C. | Is neither private virtue nor social virtue |
| D. | Is either social virtue or private virtue |
| Answer» A. Private virtue but not social virtue | |
| 175. |
MEC is inversely related to: |
| A. | Prospective yield |
| B. | Supply price |
| C. | Investment |
| D. | Rate of interest |
| Answer» A. Prospective yield | |
| 176. |
Keynes considered subjective and objective factors: |
| A. | Important determinants of consumption |
| B. | Unimportant determinants of consumption |
| C. | Determinants of investment |
| D. | Determinants of business’s willingness to pay |
| Answer» B. Unimportant determinants of consumption | |
| 177. |
The sum of marginal propensity to consume plus marginal propensity to save must equal to: |
| A. | 0 |
| B. | 1 |
| C. | 100 |
| D. | 1000 |
| Answer» B. 1 | |
| 178. |
Keynesian economics is: |
| A. | Macro |
| B. | Micro |
| C. | Both |
| D. | None |
| Answer» A. Macro | |
| 179. |
The MEC increases when: |
| A. | Capital stock increases |
| B. | Capital stock decreases |
| C. | Capital remains constant |
| D. | None of the above |
| Answer» B. Capital stock decreases | |
| 180. |
Which of the following is correct? |
| A. | 1+MPS = MPC |
| B. | 1- MPC = MPS |
| C. | MPC + MPS >1 |
| D. | MPC+ MPS<1 |
| Answer» B. 1- MPC = MPS | |
| 181. |
Starting point of Keynesian economics is: |
| A. | Effective demand |
| B. | Individual demand |
| C. | Aggregate demand |
| D. | Market demand |
| Answer» A. Effective demand | |
| 182. |
Keynesian three sector model consist of: |
| A. | Business sector, service sector, external sector |
| B. | Households, business, government |
| C. | Government sector, open sector, service sector |
| D. | Government sector, private sector, open sector |
| Answer» B. Households, business, government | |
| 183. |
A substantial increase in the rate of interest can cause: |
| A. | Increase in savings |
| B. | Reduce propensity to consume |
| C. | All the above |
| D. | None of the above |
| Answer» C. All the above | |
| 184. |
Functional relationship between saving and disposable income is: |
| A. | Saving function |
| B. | Income function |
| C. | Consumption function |
| D. | Investment function |
| Answer» A. Saving function | |
| 185. |
As the value of MPC increases, the value of multiplier: |
| A. | Decreases |
| B. | Increases |
| C. | Constant |
| D. | Cannot say |
| Answer» B. Increases | |
| 186. |
Who among the following pioneered the first real estimate of national income? |
| A. | Adam Smith |
| B. | David Ricardo |
| C. | William Petty |
| D. | None of the above |
| Answer» C. William Petty | |
| 187. |
Who argued that national income is simply equal to “net product of agriculture”? |
| A. | Mercantilists |
| B. | Physiocrats |
| C. | Classical Economists |
| D. | Neo Classical Economists |
| Answer» B. Physiocrats | |
| 188. |
Who argued that “Everything that is produced in the course of a year, every service rendered, every fresh utility brought about is a part of the national wealth.”? |
| A. | JS Mill |
| B. | Stanley Jevons |
| C. | Alfred Marshall |
| D. | Robert Malthus |
| Answer» C. Alfred Marshall | |
| 189. |
Who made the first major attempt to estimate national income in a somewhat comprehensive manner? |
| A. | Robert Fisher |
| B. | John Maynard Keynes |
| C. | Simon Kuznets |
| D. | Arthur Pigou |
| Answer» C. Simon Kuznets | |
| 190. |
Consumption of capital good in the process of production is called as |
| A. | Capital Consumption |
| B. | Depreciation |
| C. | Decay of Capital |
| D. | None of the above |
| Answer» B. Depreciation | |
| 191. |
Which one of the following is roughly equal to national income? |
| A. | GDP |
| B. | NNP |
| C. | GNP |
| D. | SDP |
| Answer» B. NNP | |
| 192. |
Which one of the following includes ‘income of residents’? |
| A. | GDP |
| B. | NNP |
| C. | SDP |
| D. | None of the above |
| Answer» B. NNP | |
| 193. |
Remittances made by NRIs to India in the context of national income accounting is called as |
| A. | Remittance Income |
| B. | NRI Income |
| C. | Factor Payments |
| D. | All of the above |
| Answer» C. Factor Payments | |
| 194. |
Who first introduced the concept of circular flow of income? |
| A. | William Petty |
| B. | Adam Smith |
| C. | David Ricardo |
| D. | Fancois Quesnay |
| Answer» D. Fancois Quesnay | |
| 195. |
Which one in the following is a stock variable? |
| A. | Income |
| B. | Investment |
| C. | Capital |
| D. | Fiscal Deficit |
| Answer» C. Capital | |
| 196. |
Which one in the following is a flow variable? |
| A. | Debt |
| B. | Wealth |
| C. | Unemployment |
| D. | GDP |
| Answer» D. GDP | |
| 197. |
Why do not the sale or purchase of used goods are not included in the GDP? |
| A. | Used goods have only limited life |
| B. | Used goods are not fresh production |
| C. | Used goods are included in the previous GDP calculations |
| D. | All the above |
| Answer» C. Used goods are included in the previous GDP calculations | |
| 198. |
Inventories are unsold goods produced by a firm, then why do they are included in GDP? |
| A. | Inventories represent value |
| B. | Inventories add to the stock of the firm |
| C. | They are purchases by the firm itself |
| D. | All the above |
| Answer» C. They are purchases by the firm itself | |
| 199. |
The value of ‘intermediate goods’ are excluded from GDP calculation because: |
| A. | It will increase the GDP unduly |
| B. | It results in multiple counting of same value |
| C. | Intermediate goods are not important |
| D. | All the above |
| Answer» B. It results in multiple counting of same value | |
| 200. |
Value added at each stage of production means: |
| A. | Value of output minus value of input |
| B. | Total value added by that stage |
| C. | Total value produced at that stage |
| D. | All of the above |
| Answer» A. Value of output minus value of input | |
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