Business
Economics SEM III
Important
Objectives
1) The Credit for the Development of Macro
Economic approach must go to Lord
Keynes
a) Dr. Marshall
b) Prof. Pigou
c) Lord Keynes
d) Mrs. John Robinson
2) Macro
economics studies the problem of inflation in the country.
a) Micro
b) Macro
c) Static
d) Industrial
3) Macro – Economics does not study product pricing.
a)
Whole economy
b) National income
c) Aggregates supply
d) Product pricing
4) Growth
theory is the subject matter of Macro – Economics.
a) Growth theory
b) Factory Pricing
c) Market Structures
d) Individual Incomes
5) Micro and Macro approaches are complementary.
a)
Competitive
b) Alternative
c) Substitutes
d) Complementary
6) Macro
economics is also called as aggregative economics.
a) Competitive economics
b) Alternative economics
c) Substitutes economics
d) Aggregative economics
7) Macro economics deals with study
of the whole society’s economic problem.
a) Micro
b) Macro
c) Static
d) Industrial
8) Law
of Demand and Supply is not a subject matter of macro economics.
a) National income accounting
b) Law of Demand and Supply
c) Business Cycle
d) None of above
9) Per
capita measurement indicate
how national income is distributed.
a) GDP
b) GNP
c) Per capita income
d) None of above
10) Monetarism
schools of thought in macro economics focuses on the role of money
supply and central bank.
a) Monetarism
b) Development economic
c) Classical school
d) None of above
11) The overall economic activity can be
represented in the following way;
(a)
Circular flow of saving
(b) Circular flow of Income
(c)
Circular flow of investment
(d)
None of the above
12) ------- is a leakage from circular flow of
aggregate income and expenditure
(a)
Export
(b) Tax
(c)
Investments
(d)
Public Expenditure
13) Which of the following is not the economic
agent in a three sector economy.
(a)
Household
(b) Foreign sector
(c)
Firms
(d)
Government
14) Which of the following results in the
inflow of money in an open economy
(a)
Imports of goods and services
(b) Exports of goods and services
(c)
Lending to other countries
(d)
None of the above
15) National
Income is the subject matter of macro economics.
(a) Micro
(b) Macro
(c) Managerial
(d) Business
16) GDP
(FC) is equal to GDP (MP) - indirect
taxes.
(a) Factor cost
(b) Indirect taxes
(c) Depreciation
(d) Subsidy
17) In
India, the responsibility for the calculation of national income rests
with Central Statistical Organization.
(a) World Bank
(b) International Monetary fund
(c) Central statistical organization
(d) International Labour Organization
18) National
Income is flow concept.
(a) Stock
(b) Final
(c) Flow
(d) Intermediate
19) Paper
purchased by a publisher is intermediate good.
(a) Intermediate good
(b) Final good
(c) Consumer good
(d) Service.
20) Transfer income is excluded in
the calculation of National Income.
(a) Factor
(b) Movable
(c) Transfer
(d) Portable
21) Income method is also known as factor
cost method.
(a) Factor cost
(b) Market price
(c)
Output
(d) Expenditure
22) GDP is the total money value of
final goods and services produced within the domestic territory of the country
during a given year.
(a) GDP
(b) GNI
(c) NNI
(d) None of the above
23) GNI is the total money value of
final goods and services produced by the nationals during a given year.
(a) GDP
(b) GNI
(c) NNI
(d) None of the above
24) GDP at constant prices measures
the real growth of the economy.
(a) GDP at constant prices
(b) GDP at current prices
(c) NDP at current prices
(d) None of the above
25) Personal income is the sum of
all income actually received by the people in the country.
(a) Personal income
(b) GDP at current prices
(c) NDP at current prices
(d) None of the above
26) GNI
in an open economy is equal to GDP +
(X – M) + R - P.
(a) GDP + (X – M)
(b) GDP + (X – M) + R - P
(c) GDP + (R - P)
(d) None of the above
27) GDP – Net Natural Capital consumption is used to calculate GGDP.
(a) GDP + (X – M)
(b) GDP + (X – M) + R - P
(c) GDP + (R - P)
(d) GDP –
Net Natural Capital Consumption
28) National Income serves as useful
yardstick to measure the annual performance of a country’s economy.
(a) National income
(b) Per capita income
(c) Total product
(d) none
of the above
29) Green
Gross Domestic product is an index of -------- .
(a) National income
(b) Per capita income
(c) Total product
(d) All of the above
30) In which of
the following phase of business cycle it register an upward trend in output,
income and employment.
(a) Depression
(b)
Recovery
(c) Prosperity
(d) Recession
31) In which of
the following phase of business cycle there is considerable fall in the
production, employment, income and investment
(a)
Depression
(b) Recovery
(c) Prosperity
(d) Recession
32) During which
phase output, employment, income etc begins to decline.
(a) Depression
(b) Recovery
(c) Prosperity
(d)
Recession
33) During the
prosperity phase of business cycle, the bank credit normally ___
(a)
Expands
(b) Contracts
(c) Remains the same
(d) None of above
34) When national
output rises, the economy is said to be in
___
(a)
An expansion
(b) A deflation
(c) An inflation
(d) A recession
35) The period
between the trough of the business cycle and the next peak is called the ___
(a)
Expansionary phase
(b) Cyclic phase
(c)
Contractionary phase
(d)
Expansionary phase
36) The recession
phase of trade cycle begins at
(a)
Peak
(b) Trough
(c) Midpoint of expansion
(d) None of above
37) According to which law the supply creates
its own demand
(a)
Keynes
(b) Say’s
(c)
Pigou’s
(d)
Samuelson’s
38) According to whom the equality between
saving and investment can not be brought about by changes in the rate of
interest.
(a) Keynes
(b)
Say’s
(c)
Pigou’s
(d)
Samuelson’s
39) According to whom wages are non flexible
downwards
(a) Keynes
(b)
Say’s
(c)
Pigou’s
(d)
Samuelson’s
40) According to Say’s law the supply creates
its own ––––––
(a)
Price
(b) Demand
(c)
Supply
(d)
None of these
41) –––––– rejected the classical assumption
of full employment equilibrium.
(a) Keynes
(b)
Say’s
(c)
Pigou’s
(d)
Samuelson’s
42) The General
theory of employment, Interest and Money was written by
(a)
J.M. Keynes
(b) Adam Smith
(c) Alfred Marshall
(d) Paul Samuleson
43) The Keynesian
theory stresses ___ as a crucial factor in determining the level of income and
employment.
(a)
Effective demand
(b) Individual demand
(c) Market demand
(d) Pent up demand
44) The Keynesian
economics adopt ___ views
(a)
Short term
(b) Medium term
(c) Secular term
(d) Long term
45) The
components of effective demand are ___
(a)
C+I+G
(b) C+I
(c) C+G
(d) I+G
46) The point
where aggregate demand and the aggregate supply curve intersects is called ___
(a)
Effective demand
(b) Individual demand
(c) Market demand
(d) Pent up demand
47) According to
Keynes in order to increase employment we have to increase aggregate ___
(a)
Demand
(b) Supply
(c) Output
(d) Investment
48) Which of the
following curve is a schedule of minimum amount of proceeds required to provide
various levels of employment ___
(a)
Aggregate supply
(b) Individual demand
(c) Market demand
(d) Pent up demand
49) The General
Theory of Employment Interest and money was written by J.M. Keynes.
a)
David Ricardo
b)
Adam Smith
c) J.M. Keynes
d) Alfred Marshall
50) The part of
income, which is not spent on consumption is called saving.
a)
Expenditure
b)
Saving
c) Investment
d) Public debt
51) Intersection
between aggregate demand and aggregate supply curves determines the point of effective demand.
a)
Composite
b)
complementary
c) Joint
d) effective
52) When the
total income increases, consumption expenditure also increases .
a)
Also increases
b)
Decreases
c)
Remains constant
d)
Becomes zero
53) When income
increases consumption and saving increase
.
a)
Increase
b)
Decrease
c)
Are constant
d)
Are equal
54) For
satisfying human wants, uses of goods and services means consumption .
a)
Consumption
b)
Saving
c)
Expenditure
d)
Income
55) Keynes consumption function helps to invalidate Say’s law .
a)
Keynes theory
b)
Say’s law
c)
Fishers equation
d)
Employment theory
56) When incomes
equal consumption savings will be –––––––– .
a)
Positive
b)
Zero
c)
Negative
d)
Infinity
57) After
reaching full employment the aggregate supply curve becomes ––––––––
.
a)
Upward sloping
b)
Vertical straight line
c)
Downward sloping
d)
None of above
58) Investment
will be equilibrium when MEC becomes equal to the given
current rate of interest.
a)
MEC
b)
Profit
c)
Saving
d)
None of above
59) MEC
curve slopes downwards.
a)
Slopes upwards
b)
Slopes downwards
c)
Remain constant
d)
None of above
60) MEC refers
to expected
rate of profit.
a)
Expected rate of profit
b)
Actual profit
c)
Expected rate of interest
d)
None of above
61) If a part of
an increase in income is spent on imports the value of multiplier will be which
of the following
(a) High
(b) Low
(c) Not change
(d) Increase.
62) The value of
multiplier is directly related to
(a) MPS
(b) MPC
(c) APC
(d) APS
63) When
investments falls which of the following ways the multiplier operates.
(a) Forward
(b) Backward
(c) Does not change
(d) None of above
64) The value of
multiplier depends upon which of the following
(a) Multiplier period
(b) Availability of resources
(c) Availability of consumer goods
(d)
All of above
65) When ___ is higher, greater is the multiplier
effect.
(a) Marginal propensity to save
(b) Marginal propensity to save
(c) Marginal propensity to tax
(d)
Marginal propensity to consume
66) The
relationship between disposable income and consumer spending is ___
(a) Negative
(b) Positive
(c) Neutral
(d) None of above
67) The Keynesian
multiplier is simply the reciprocal of
___
(a) Marginal propensity to consume
(b)
Marginal Propensity to save
(c) Marginal propensity to invest
(d) MPC + MPS
68) According to
Keynes, interest is a price ___
(a)
For parting with liquidity
(b) For saving
(c) For sacrifice involved in saving
and waiting
(d) None of above
69) Demand for
money precautionary motive is the function of ___
(a)
Income
(b) Interest
(c) Uncertainty
(d) None of above
70) Keynes in his
theory of interest neglected ___
(a)
Real factors
(b) Monetary factor
(c)
Both a and b
(d) None of above
71) Transaction
motive of liquidity preference is
___
(a)
Interest inelastic
(b) Interest elastic
(c)
Both a and b
(d) None of above
72) Precautionary
demand for liquidity is determined by
___
(a)
Income
(b) Interest
(c) Uncertainty
(d) None of the above
73) Which of the following curve shows the
goods market equilibrium.
(a)
LM curve
(b) IS curve
(c)
Ad demand curve
(d)
None of the above
74) On which side of the following curve there
is excess supply in goods market
(a)
Left side of IS curve
(b) Right side of IS curve
(c)
Right side of LM curve
(d)
None of the above
74) Which of the following is the slope of IS
curve
(a)
Positive slope
(b) Negative slope
(c)
Direct slope
(d)
None of the above
75) Which of the following will shift the IS
curve to the left.
(a)
Increase in govt. expenditure
(b) Decrease in government expenditure
(c)
Increase in autonomous spending
(d)
None of the above
76) IS / LM model is -------.
(a)
Microeconomic tool
(b) Macroeconomic tool
(c)
None of the above
77) The LM curve indicates –––––––––
equilibrium.
(a) Money market
(b)
Goods market
(c)
Foreign market
(d)
Labour market
78) Phillips
curve brings out tradeoff between
(a) Wages and employment
(b)
Inflation and unemployment
(c) Inflation and value for money
(d) None of the above
79) In the long
run Phillips curve is
(a) Slopes upward from left to right
(b)
Vertical
(c) Horizontal
(d) None of the above
80) Stagflation
results in
(a) Increase in supply of goods
(b)
Increase in price level
(c) Increase in employment
(d) None of the above
81) Stagflation
brings down
(a) Prices
(b)
Employment
(c) Both a and b
(d) None of the above
82) Supply side
economics aims at increasing income by
(a) Reducing prices
(b)
Reducing taxes
(c) Increasing government
expenditure
(d) None of the above
83) A tax cut
according to Milton Friedman
(a) Increases prices
(b)
Increases budgetary deficit
(c) Increases budgetary surplus
(d) None of the above
84) Laffer curve
brings out the relationship between
(a) Price level and employment
(b)
Tax revenue and marginal tax rate
(c) Price level and investment
(d) None of the above
85) When money
supply is viewed at a point of time, it is a ___
(a)
Stock of money
(b) Flow concept
(c) Liquid concept
(d) None of above
86) When money
supply is viewed over a period of time, it is a ___
(a) Stock of money
(b)
Flow concept
(c) Liquid concept
(d) None of above
87) M1 is equal
to ___
(a)
C + DD+ OD
(b) C+DD
(c) C + OD
(d) None of above
88) A barter
economy is ___
(a) Monetized
(b)
Non monetized
(c) Less monetized
(d) None of above
89) The cash
reserve ratio is determined by ___
(a) Commercial bank
(b) The IMF
(c)
The Central bank
(d) The WTO
90) A deficit
budget will ___
(a) Reduce money supply
(b)
Increase money supply
(c) Neutralize money supply
(d) None of above
91) Deficit
financing always leads to an ___ in the
money supply.
(a)
Increase in
(b) Reduction in
(c) Will have no impact
(d) None of above
92) If the money
supply is 500 and nominal income is 3,000 the velocity of money is ___
(a) 60
(b)
6
(c) 1/6
(d) Undefined
93) If the money
supply is 600 and nominal income is 3,000 the velocity of money is ___
(a) 1/5
(b) 50
(c)
5
(d) 600
94) The velocity
of money is ___
(a) The same as the inflation rate
(b) The number of times per year a
rupee is used to pay wages
(c)
The rate at which new rupee can be printed
(d)
The average number of times per year a rupee is use to buy goods and
services
produced in the economy
(d)
None of the above
95) Tradition
measure of money supply includes
___
(a) Demand deposits and time
deposits
(b) Currency and time deposits
(c)
Currency and demand deposit
(d) None of the above
96) The value of
money multiplier is determined by
___
(a) Currency deposits ratio and time
deposit
(b) Currency deposit ratio and coins
and notes
(c)
Currency deposit ratio and reserve ratio
(d)
None of the above
97) The average
number of times a unit of money is used for making payments for final goods and
services is known as ___
(a) Transactions velocity
(b) Monetary velocity
(c) Income velocity
98) The Neo
classical economist emphasized on the use of money as ___
(a)
Store of Value
(b) Medium of exchange
(c) Both a and b
(d) None of above
99) The modern
approach to demand for money is known as
___
(a) Liquidity preference approach
(b) Cash balance approach
(c) the transactions approach
(d)
both a and b
100) The demand for
money and the cost of holding money has an
___ relationship.
(a) Direct
(b)
Neutral
(c) Inverse
(d) None of above
101) According to
Keynes which is not motive behind the demand for money
(a)
Income Motive
(b) Speculative motive
(c) Transactions motive
(d) Precautionary motive
102) Keynes
speculative motive for holding money is based on money’s function as
(a) Medium of exchange
(b) Source of income
(c) Unit of account
(d)
Store value
103) The demand for
money as a cushion against unexpected contingencies is called
(a) Transactions motive
(b)
Precautionary motive
(c) Insurance motive
(d) Speculative motive
104) According to
Keynes theory of liquidity preference, velocity increases when
(a)
Interest rate increase
(b) Income increases
(c) Brokerage commission increase
(d) The money supply fall
105) Keynes
liquidity preference theory indicates that the demand for money is
(a) Constant
(b) Negatively related to bond
values
(c) Positively related to interest
rates
(d)
Negatively related to interest rates
106) The inverse of price level measures ___
(a) Value of money
(b)
Medium of exchange
(c)
both a and b
(d)
None of above
107) ___ first developed the Cambridge version of
the quantity theory of money.
(a) Alfred Marshall
(b)
J.S.Mill
(c)
both a and b
(d)
None of above
108) In Fisher’s equation which of the following
is exogenously determined?
(a) M
(b)
P
(c)
V
(d)
None of above
109) Which of the following represents Fisher’s
equation?
(a) MV = PT
(b)
V = M / P
(c)
both a and b
(d)
None of above
110) During periods
of rising inflation and rising interest rates we expect the demand for real
cash to
(a) Fall
(b)
Rise
(c) Fluctuate
(d) Not changes
111) Deflation is
just the opposite of ___
(a)
Inflation
(b) Relfation
(c) Disinflation
(d) Hyper inflation
112) Cost push
inflation can start with
(a)
an increase in oil prices
(b) a decrease in the quantity of
money
(c) an increase in government
expenditure
(d) a decrease in investment
113) Money supply
and prices are ___ related.
(a)
Directly
(b) Inversely
(c) Not related
(d) None of above
114) A sellers
market is created during ___
(a) Deflation
(b)
Inflation
(c) Disinflation
(d) Reflation
115) During
inflation RBI would tighten ___
policy.
(a) Fiscal
(b) EXIM
(c) Industrial
(d)
Monetary
116) Government’s
budgetary policy during inflation should aim at.
(a) Increasing expenditure
(b) Increasing investment
(c) Lowering taxes
(d)
Decreasing expenditure
*****************************************************
Comments
Post a Comment