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Basics of Economics Studies | Set 2

1. The difference between GDP and NDP equals:

Correct : D. Depreciation

2. Which of the following is true?

Correct : B. GNP = GDP + Net factor income from abroad

3. NNP is equal to:

Correct : B. GNP minus depreciation

4. Which of the following is not a method of national income estimation?

Correct : A. Matrix method

5. An accounting year in India is:

Correct : C. Fiscal year

6. Increase in real National Income (NI) means increase in:

Correct : B. NI at constant prices

7. Net indirect taxes means:

Correct : C. Indirect taxes minus subsidies

8. Net factor income from abroad shows the difference between:

Correct : C. GNP and GDP

9. Per capita income is equal to:

Correct : B. National income/population

10. National income in India is estimated by:

Correct : C. CSO

11. The first estimate of National income in India was done by:

Correct : C. Dadabai Naoroji

12. Pick the odd one out:

Correct : C. NI at current prices

13. GDP deflator is given by:

Correct : B. Nominal DGP/Real GDP

14. Wear and tear of capital due to constant use means:

Correct : C. Depreciation

15. Value of output minus intermediate consumption is:

Correct : B. Value added

16. Personal income minus personal taxes is:

Correct : C. Disposable income

17. Primary sector includes:

Correct : A. Agriculture

18. National income is a --------variable.

Correct : A. Flow

19. In India, National income is estimated at:

Correct : C. Both current and constant prices

20. Which of the following is true:

Correct : A. GDP is a geographical concept

21. GNP measured in terms of current market prices is called:

Correct : A. Nominal GNP

22. In India, the current base year is:

Correct : D. 2004-05

23. Which of the following doest not include in the group?

Correct : D. NDP

24. The term “Classical Economics” was first used by:

Correct : C. Karl Marx

25. Who is the leader of the Classical school?

Correct : D. Adam Smith.

26. The core of classical economists is:

Correct : C. Say’s Law of Market

27. ‘Law of Market’ is attributed to:

Correct : B. J.B. Say

28. The Classicals adopted ---------policy:

Correct : B. Laissez-faire

29. According to Classicals, full employment is a:

Correct : B. Normal phenomenon

30. According to the Classical economists, general over production is:

Correct : B. Impossible

31. According to the Classical economists, savings and investments are:

Correct : B. Always equal

32. Wages and prices are ----------, according to the Classicals.

Correct : B. Flexible

33. Classical aggregate supply curve is:

Correct : B. Perfectly inelastic

34. Pick the odd one from the following:

Correct : D. J.M. Keynes

35. According to the Classicals, investment is a function of:

Correct : D. Rate of Interest

36. “Supply creates its own demand” is called:

Correct : B. Law of market

37. Under the classical system, the equilibrium will be at:

Correct : B. Full employment

38. When savings exceeds the demand for savings, the rate of interest will:

Correct : B. Fall

39. Rate of interest will increase when the demand for saving is:

Correct : C. More than its supply

40. In the Classical system, the role of the government is:

Correct : C. Limited

41. Equilibrium in the economy is settled by ---------, according to the Classicals.

Correct : B. Price mechanism

42. Say’s Law of market was proved wrong by:

Correct : B. Great Depression

43. Self interest, competition, profit motive are the features of:

Correct : B. Capitalism

44. The Great Depression was during:

Correct : A. 1930s

45. The equilibrium price is determined by the forces of:

Correct : C. Both Demand and Supply

46. Temporary unemployment is -------------, according to the Classical economists:

Correct : C. Possible

47. J.B. Say was a ---------------Economist.

Correct : C. French

48. Pick the odd one out:

Correct : D. J.M. Keynes

49. Author of the book ‘The General Theory of Employment, Interest and Money’:

Correct : C. J.M. Keynes

50. ‘The General Theory’, was published in :

Correct : C. 1936

51. The branch of Economics that deals with economic aggregate is called:

Correct : C. Macro Economics

52. The central theme of Keynesian Theory is:

Correct : C. Effective demand

53. Who repudiated Say’s law of market?

Correct : D. J.M. Keynes

54. Effective demand is that demand when:

Correct : C. Aggregate demand is equal to aggregate supply

55. The concept of effective demand is associated with the name of:

Correct : B. Keynes

56. The proportion between total income and total consumption is called:

Correct : A. Average propensity to consume

57. The proportion between incremental income and incremental consumption is called:

Correct : C. MPC

58. The proportion between total income and total saving is called:

Correct : B. APS

59. 1- MPC is called:

Correct : D. MPS

60. APC + APS is equal to:

Correct : C. 1

61. Multiplier is obtained by:

Correct : D. 1/1-MPC

62. Exports minus imports is termed as:

Correct : C. Net exports

63. As income increases consumption also increases, but:

Correct : C. Less than proportionately

64. The expected return on investment is called:

Correct : D. Marginal efficiency of investment

65. Marginal efficiency of investment curve is:

Correct : A. Slopping downwards

66. According to Keynes, unemployment is due to:

Correct : D. Deficiency in effective demand

67. “In the long run, we are all dead”. Who said this?

Correct : A. Keynes

68. According to Keynes, investment is a function of:

Correct : D. MEI and rate of interest

69. Keynes believed in :

Correct : B. Under employment equilibrium

70. According to Keynes, wages and prices are:

Correct : A. Rigid

71. In Economics, 1930s is popularly known as the period of:

Correct : B. Great Depression

72. Keynesian aggregate supply curve is:

Correct : A. Perfectly elastic

73. Keynes strongly argued for:

Correct : D. Governmental intervention

74. Consumption expenditure directly varies with:

Correct : C. Disposable income

75. An important issue of macro economics is the determination of:

Correct : D. Income and employment

76. Pick the odd one:

Correct : D. Law of market

77. Which of the following items does not include in the group?

Correct : C. Rate of Interest

78. If marginal propensity to consume is 0.8, the value of multiplier will be:

Correct : C. 5

79. Who is known as the father of Modern Economics?

Correct : A. Adam Smith

80. Goods without which people can not live are called:

Correct : C. Necessaries

81. The problem of what to produce is a problem of:

Correct : D. Allocation of resources

82. Those things that possess both utility and scarcity are called:

Correct : A. Economic Goods

83. If a worker specializes in the production of a single good, it is called:

Correct : A. Product based division of labour

84. Goods produced for use in future productive process are called:

Correct : D. Capital goods

85. In a horizontal straight line demand curve, the price elasticity of demand is:

Correct : B. Infinity

86. Who wrote the article Laws of Returns Under Competitive Conditions?

Correct : D. P. Sraffa

87. Increase in output less than proportional to increase in inputs is called:

Correct : C. Diminishing returns

88. A simplified representation of a real situation is called:

Correct : D. Economic Model

89. When marginal product reaches its maximum, what can be said of total product?

Correct : C. Total product is increasing if marginal product is still positive

90. When a firm doubles its inputs and finds that its output has more than doubled, this is known as:

Correct : A. Economies of scale.

91. When average product is at a maximum, marginal product is:

Correct : C. Equal to average product

92. The want satisfying power of a commodity:

Correct : B. Utility

93. Supply curve represents -------- relationship between quantity and price.

Correct : A. Direct

94. Laws of return shows ---------production function.

Correct : A. Short-term

95. In classical theory the level of employment is a function of:

Correct : D. Real wage rate

96. Consumption of capital good in the process of production is called as:

Correct : B. Depreciation

97. Economic Laws are:

Correct : A. Statement of tendencies

98. Returns to scale examines the production function in the:

Correct : C. Long term