2. Inflation is the state in which ..............................
Correct : A. the value of money decreases
3. Which of the following class will not be negatively affected by the higher inflation?
Correct : D. business class
4. Which of the following is an effect of inflation?
Correct : D. all the above
5. The trough of a business cycle occurs when _____ hits its lowest point.
Correct : C. aggregate economic activity
6. . When aggregate economic activity is increasing, the economy is said to be in
Correct : A. an expansion.
7. In a boom:
Correct : A. unemployment is likely to fall
8. Peaks and troughs of the business cycle are known collectively as
Correct : B. turning points.
9. When aggregate economic activity is declining, the economy is said to be in
Correct : A. a contraction.
10. Industries that are extremely sensitive to the business cycle are the
Correct : D. capital goods and durable goods sectors.
11. Economists use the term shocks to mean
Correct : B. typically, unpredictable forces that have major impacts on the economy.
12. The government spending multiplier is as higher as:
Correct : B. higher is the mpc
13. Point out which of the following is not an instrument of fiscal policy:
Correct : A. an increase in the interest rate
14. The function of investment spending shifts to the left if:
Correct : D. business expectations get worse
15. An increase in the interest rate1
Correct : A. shifts the aggregate demand curve to the left
16. As higher is the MPS
Correct : A. lower is the multiplier.
17. To increase the money supply, the bank central could:
Correct : B. purchase bonds in the open-market
18. The variable that connect the market of money and the market of goods via investment spending is:
Correct : B. the interest rate
19. Point out the monetary policy instrument:
Correct : B. open-market operations
20. Monetary Policy is a regulatory policy by which the ______or monetary authority of a country controls the
supply of money, availability of bank credit and cost of money that is the rate of interest:
Correct : A. central bank (rbi)
21. _______controls the supply of money and bank credit:
Correct : A. rbi
22. The main objective of monetary policy in India is_______:
Correct : A. growth with stability
23. The Cash Reserve Ratio is an effective instrument of credit control. Under the RBI Act, 1934 every
______bank has to keep certain minimum cash reserves with RBI:
Correct : B. commercial bank
24. If RBI wants to increase the credit flow it buys ______:
Correct : A. government securities
25. Trade between two countries is called
Correct : D. International Trade
26. According to Classical economists, _ is the reason for a country to specialie in the production of a commodity
Correct : C. International Division of labor
27. International trade is the result of an advantage country possesses in producing a particular commodity at a _
Correct : A. Lower Cost
28. Absolute difference in Cost is explained by
Correct : B. Adam Smith
29. According to Adam Smith, international trade is advantageous for all participating countries only if they enjoy _ difference in cost of production
Correct : C. Absolute
30. Who aid the following, " The esence of international trade is not the absolute difference in cost but a comparative difference in cost."
Correct : B. David Ricardo
31. Ricardian theory has _ countries and
commodities
Correct : D. 22
32. Which of the following is NOT an assumption of Comparative Cost Advantage Theory?
Correct : B. Increasing return to scale
33. Comparative Advantage is expressed in _
Correct : C. Cost ratios
34. England 1 unit wine =1/2unit cloth, Portugal 1 unit wine = 1 unit cloth. This is an example of
Correct : A. Comparative Cost
35. Comparative Advantage theory is based on _ value
Correct : D. labor theory
36. No change in technology, no transport cost, constant returns to scale - these assumptions make the Comparative Cost advantage theory
__
Correct : C. Static
37. If a country enjoys an absolute advantage in the production of all commodities then also trade is possible”. Who said this?
Correct : B. David Ricardo
38. According to H-O theory, International trade is, but a pecial case of _ _ trade.
Correct : D. Inter-regional
39. H-o Theory s based on value theory.
Correct : C. General
40. H-O Theory is a _ _ model
Correct : B. 2 X 2 X 2
41. Commodity Y is Capital intensive if _ _
Correct : C. Ky /Ly > Kx / Lx
42. If,England 1 wine = 1/2 cloth and if Portugal 1 wine = 1 cloth, this I an example of
Correct : A. Comparative advantage
43. If Commodity Y requres 2 units of capital and 2 units of labor and commodity X requires 1 unit of capital and 4 units of labor then Y is
Correct : C. Capital Intensive
44. Factor intensity is measured in _ terms
Correct : B. Factor ratios
45. Total amount of labor in Nation 1 is greater than labor in nation 2 if
Correct : A. TK1 /TL1 > TK2 /TL2
46. Factor abundance can be explained using
Correct : D. PPC
47. A nation is capital abundant if
Correct : B. PK1/PL1
>PK2/PL2
48. Abundance of a factor makes it
Correct : D. Cheap
49. r1 / w1 < r2 / w2 means
Correct : A. Nation 1 is capital abundant
50. The rate at which goods are exchangeed between two countries is called
Correct : D. Terms of trade
51. The ratio of price of export to price of import is called
Correct : D. Terms of trade
52. Px / Pm is
Correct : C. Terms of trade
53. When many commodities are traded terms of trade is expresed as _ of its export pricr to import price
Correct : C. index ratio
54. If import prices rse more than export prices, terms of trade have _
Correct : B. deteriorated
55. The limitations of Commodty terms of trade gave rise to _
Correct : B. gross barter term of trade
56. A favourable terms of trade indicates _ imports for given exports
Correct : A. more
57. is equally important as price of exports
Correct : A. Income from exports
58. A decline in price would increase exports if demand is__
Correct : B. elastic
59. _ _ introduced the concept of Gross barter terms of trade
Correct : C. F W Taussig
60. Single factoral terms of trade take in to account
Correct : B. Changes in efficiency of factors producing export goods
61. Two countries can gain from foreign trade if
Correct : C. Both cost ratios and price ratios are different
62. J.S.Mill brought in _ factor to explain termsof trade
Correct : B. demand
63. Reciprocal demand is
Correct : A. Mutual demand of two countries
to each other’s goods
64. The developing Countries it is argued usually
Correct : B. Suffers from adverse terms of trade
65. Comparative advantage occurs when ……..than other country .
Correct : C. A country has a lower opportunity cost in the production of a good
66. A tariff------
Correct : B. Reduces the volume of trade
67. Terms of trade of less developed countries are generally unfavourable because
Correct : A. They export primary goods
68. According to J S Mill, equilibrium terms of trade is determined by __ demand
Correct : D. Reciprocal
69. Marshall and Edgeworth introduced a geometrical device to explain the gains from trade which is known as
Correct : B. Offer curve
70. The concept of offer curves is associated with the names of
Correct : C. Alfred Marshall an
71. The offer curve of a country is based on
Correct : A. Relative prices
72. Reciprocal demand is
Correct : D. Mutual demand of tw
73. In a free world in which no restrictions exist, international trade will lead to
Correct : D. Increased efficiency
74. A commercial policy is a government policy related to _.
Correct : B. Economic transactions across international borders
75. The classical economist Adam Smith was a champion of _ .
Correct : B. Free Trade
76. The origin of protectionist policy can be traced back to _ __.
Correct : B. Mercantilists days
77. Infant Industry Argument is justified for _ .
Correct : B. For enabling competitive efficiency of industries
78. Pick out the wrong statement.
Correct : C. Tariffs reduce the prices of the commodity on which it is levied.
79. Pick out the wrong statement.
Correct : C. Voluntary export restraint is an example of tariff barriers.
80. Economic integration means.
Correct : B. Removal of customs duties
81. _ is the highest form of economic integration.
Correct : D. Economic union
82. The European Economic Community (EEC) was founded in 1957 under the treaty of _.
Correct : B. Rome
83. Pick out the feature which does not describe European Union.
Correct : C. Independent policies for agriculture among member nations.
84. European union was initially formed with _ European countries.
Correct : C. 6
85. Prime Minister _ announced the government’s intention that U.K. will not seek permanent membership of the European single market or the EU customs union after leaving the EU.
Correct : D. Theresa May
86. The referendum for Brexit was held on _ .
Correct : B. June 23rd 2016
87. The full form of ASEAN is _ .
Correct : C. Association of South East Asian Nations
88. ASEAN was formed with the signing of _.
Correct : D. Bangkok declaration
89. Pick out the wrong statement.
Correct : B. U.K. is a member of ASEAN
90. The objective of commercial policy is / are
_ .
Correct : D. Restrict exports
91. Under free trade _ benefit more.
Correct : A. consumer
92. Under free trade __ will be higher.
Correct : A. wages
93. Free trade is based on the principle of _ _ .
Correct : A. Comparative cost advantage
94. Which of the following is not an argument for protectionism .
Correct : B. to increase the level of imports
95. A tariff is a tax on _ _ .
Correct : B. foreign goods and service
96. Protectionism
Correct : C. increase the government earnings from tax
97. Which of the following is an argument far free trade _ .