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General Economics 1 | Set 2

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

Correct : A. Direct

2. National Income means:

Correct : C. NNP at Factor Cost

3. The difference between GDP and NDP equals:

Correct : D. Depreciation

4. Which of the following is true?

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

5. NNP is equal to:

Correct : B. GNP minus depreciation

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

Correct : A. Matrix method

7. An accounting year in India is:

Correct : C. Fiscal year

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

Correct : B. NI at constant prices

9. Net indirect taxes means:

Correct : C. Indirect taxes minus subsidies

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

Correct : C. GNP and GDP

11. Per capita income is equal to:

Correct : B. National income/population

12. National income in India is estimated by:

Correct : C. CSO

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

Correct : C. Dadabai Naoroji

14. Pick the odd one out:

Correct : C. NI at current prices

15. GDP deflator is given by:

Correct : B. Nominal DGP/Real GDP

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

Correct : C. Depreciation

17. Value of output minus intermediate consumption is:

Correct : B. Value added

18. Personal income minus personal taxes is:

Correct : C. Disposable income

19. Primary sector includes:

Correct : A. Agriculture

20. National income is a --------variable.

Correct : A. Flow

21. In India, National income is estimated at:

Correct : C. Both current and constant prices

22. Which of the following is true:

Correct : A. GDP is a geographical concept

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

Correct : A. Nominal GNP

24. In India, the current base year is:

Correct : D. 2004-05

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

Correct : D. NDP

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

Correct : C. Karl Marx

27. Who is the leader of the Classical school?

Correct : D. Adam Smith.

28. The core of classical economists is:

Correct : C. Say’s Law of Market

29. ‘Law of Market’ is attributed to:

Correct : B. J.B. Say

30. The Classicals adopted ---------policy:

Correct : B. Laissez-faire

31. According to Classicals, full employment is a:

Correct : B. Normal phenomenon

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

Correct : B. Impossible

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

Correct : B. Always equal

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

Correct : B. Flexible

35. Classical aggregate supply curve is:

Correct : B. Perfectly inelastic

36. Pick the odd one from the following:

Correct : D. J.M. Keynes

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

Correct : D. Rate of Interest

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

Correct : B. Law of market

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

Correct : B. Full employment

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

Correct : B. Fall

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

Correct : C. More than its supply

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

Correct : C. Limited

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

Correct : B. Price mechanism

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

Correct : B. Great Depression

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

Correct : B. Capitalism

46. The Great Depression was during:

Correct : A. 1930s

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

Correct : C. Both Demand and Supply

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

Correct : C. Possible

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

Correct : C. French

50. Pick the odd one out:

Correct : D. J.M. Keynes

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

Correct : C. J.M. Keynes

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

Correct : C. 1936

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

Correct : C. Macro Economics

54. The central theme of Keynesian Theory is:

Correct : C. Effective demand

55. Who repudiated Say’s law of market?

Correct : D. J.M. Keynes

56. Effective demand is that demand when:

Correct : C. Aggregate demand is equal to aggregate supply

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

Correct : B. Keynes

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

Correct : A. Average propensity to consume

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

Correct : C. MPC

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

Correct : B. APS

61. 1- MPC is called:

Correct : D. MPS

62. APC + APS is equal to:

Correct : C. 1

63. Multiplier is obtained by:

Correct : D. 1/1-MPC

64. Exports minus imports is termed as:

Correct : C. Net exports

65. As income increases consumption also increases, but:

Correct : C. Less than proportionately

66. The expected return on investment is called:

Correct : D. Marginal efficiency of investment

67. Marginal efficiency of investment curve is:

Correct : A. Slopping downwards

68. According to Keynes, unemployment is due to:

Correct : D. Deficiency in effective demand

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

Correct : A. Keynes

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

Correct : D. MEI and rate of interest

71. Keynes believed in :

Correct : B. Under employment equilibrium

72. According to Keynes, wages and prices are:

Correct : A. Rigid

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

Correct : B. Great Depression

74. Keynesian aggregate supply curve is:

Correct : A. Perfectly elastic

75. Keynes strongly argued for:

Correct : D. Governmental invervention

76. Consumption expenditure directly varies with:

Correct : C. Disposable income

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

Correct : D. Income and employment

78. Pick the odd one:

Correct : D. Law of market

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

Correct : C. Rate of Interest

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

Correct : C. 5

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

Correct : A. Adam Smith

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

Correct : C. Necessaries

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

Correct : D. Allocation of resources

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

Correct : A. Economic Goods

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

Correct : A. Product based division of labour

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

Correct : D. Capital goods

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

Correct : B. Infinity

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

Correct : D. P. Sraffa

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

Correct : C. Diminishing returns

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

Correct : D. Economic Model

91. 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

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

Correct : A. Economies of scale.

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

Correct : C. Equal to average product

94. The want satisfying power of a commodity:

Correct : B. Utility

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

Correct : A. Direct

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

Correct : A. Short-term

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

Correct : D. Real wage rate

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

Correct : B. Depreciation

99. Economic Laws are:

Correct : A. Statement of tendencies

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

Correct : C. Long term