Multiplier process in economic theory is conventionally taken to mean: (1) the manner in which prices increase (2) the manner in which banks create credit (3) income of an economy grows on account of an initial investment (4) the manner in which government expenditure increases

Multiplier process in economic theory is conventionally taken to mean: (1) the manner in which prices increase (2) the manner in which banks create credit (3) income of an economy grows on account of an initial investment (4) the manner in which government expenditure increases
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(3) income of an economy grows on account of an initial investment Explanation: In economics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable. For example, suppose a one-unit change in some variable x causes another variable y to change by M units. Then the multiplier is M. In monetary macroeconomics and banking, the money multiplier measures how much the money supply increases in response to a change in the monetary base. The multiplier may vary across countries, and will also vary depending on what measures of money are considered. For example, consider M2 as a measure of the U.S. money supply, and MO as a measure of the U.S. monetary base.
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Multiplier process in economic theory is conventionally taken to mean : (1) the manner in which prices increase (2) the manner in which banks create credit (3) income of an economy grows on account of an initial investment (4) the manner in which government expenditure increases

Description : Multiplier process in economic theory is conventionally taken to mean : (1) the manner in which prices increase (2) the manner in which banks create credit (3) income of an economy grows on account of an initial investment (4) the manner in which government expenditure increases

Last Answer : income of an economy grows on account of an initial investment 

If an increase in investment leads to a bigger increase in national income (a) Accelerator (b) Aggregate demand © Monetarism (d) Multiplier

Description : If an increase in investment leads to a bigger increase in national income (a) Accelerator (b) Aggregate demand © Monetarism (d) Multiplier

Last Answer : (d) Multiplier

Ceteris paribus, an income tax (a) Increases the value of the expenditure multiplier and decreases the value of the net tax revenue multiplier; (b) Decreases the value of the expenditure and net tax revenue multiplier; (c) Decreases the value of the expenditure multiplier and increases the value of the net tax revenue multiplier ; (d) None of the above.

Description : Ceteris paribus, an income tax (a) Increases the value of the expenditure multiplier and decreases the value of the net tax revenue multiplier; (b) Decreases the value of the expenditure and net tax ... multiplier and increases the value of the net tax revenue multiplier ; (d) None of the above.

Last Answer :  (b) Decreases the value of the expenditure and net tax revenue multiplier;

Which of the following does not cause a shift in aggregate demand ? (a) Consumption (b) Government expenditure (c) Investment (d) Prices

Description : Which of the following does not cause a shift in aggregate demand ? (a) Consumption (b) Government expenditure (c) Investment (d) Prices

Last Answer : (d) Prices

Micro-economics is also called : (1) Income theory (2) Investment theory (3) Price theory (4) Expenditure theory

Description : Micro-economics is also called : (1) Income theory (2) Investment theory (3) Price theory (4) Expenditure theory

Last Answer : (3) Price theory Explanation: Microeconomics is the branch of economics concerned with isolated parts of the economy, for example, individual people, firms or industries. It involves such topics as the theory of prices and of the firm.

Micro-economics is also called : (1) Income theory (2) Investment theory (3) Price theory (4) Expenditure theory

Description : Micro-economics is also called : (1) Income theory (2) Investment theory (3) Price theory (4) Expenditure theory

Last Answer : Price theory

The value of investment multiplier relates to - (1) change in income due to change in autonomous investment. (2) change in autonomous investment due to change in income. (3) change in income due to change in consumption. (4) change in the income due to change in induced investment.

Description : The value of investment multiplier relates to - (1) change in income due to change in autonomous investment. (2) change in autonomous investment due to change in income. (3) change in income due to change in consumption. (4) change in the income due to change in induced investment.

Last Answer : (2) change in autonomous investment due to change in income. Explanation: The term investment multiplier refers to the concept that any increase in public or private investment spending has a ... . The investment multiplier tries to determine the financial impact for a public or private project.

Investment multiplier shows the effect of investment on - (1) Employment (2) Savings (3) Income (4) Consumption

Description : Investment multiplier shows the effect of investment on - (1) Employment (2) Savings (3) Income (4) Consumption

Last Answer : (3) Income Explanation: Investment multiplier is simply the multiplier effect of an injection of investment into an economy. The multiplier effect refers to the idea that an initial spending rise can lead to even greater increase in national income

Investment Multiplier is a (a) ratio between income and investment. (b) ratio between investment and savings (c) ratio between consumption and investment (d) None of the abov

Description : Investment Multiplier is a (a) ratio between income and investment. (b) ratio between investment and savings (c) ratio between consumption and investment (d) None of the abov

Last Answer : (b) ratio between investment and savings

The value of investment multiplier relates to (1) change in income due to change in autonomous investment. (2) change in autonomous investment due to change in income. (3) change in income due to change in consumption. (4) change in the income due to change in induced investment.

Description : The value of investment multiplier relates to (1) change in income due to change in autonomous investment. (2) change in autonomous investment due to change in income. (3) change in income due to change in consumption. (4) change in the income due to change in induced investment.

Last Answer : change in autonomous investment due to change in income.

Investment multiplier shows the effect of investment on (1) Employment(2) Savings (3) Income (4) Consumption

Description : Investment multiplier shows the effect of investment on (1) Employment(2) Savings (3) Income (4) Consumption

Last Answer : Income

Investment and savings are kept equal through a change in the level of - (1) Consumption (2) Investment (3) Government expenditure (4) Income

Description : Investment and savings are kept equal through a change in the level of - (1) Consumption (2) Investment (3) Government expenditure (4) Income

Last Answer : (1) Consumption Explanation: Desired savings are kept equal to desired investment by responses to interest rate changes. Savings identity or the savings investment identity is a concept in ... brings savings and investment into balance without any intention by business to increase investment.

Investment and savings are kept equal through a change in the level of (1) Consumption (2) Investment (3) Government expenditure (4) Income

Description : Investment and savings are kept equal through a change in the level of (1) Consumption (2) Investment (3) Government expenditure (4) Income

Last Answer : Consumption

While determining income the expenditure on which of the following items is not considered as investment? (1) Construction of factory (2) Computer (3) Increase in the stock of unsold articles (4) Stock and share in joint stock company

Description : While determining income the expenditure on which of the following items is not considered as investment? (1) Construction of factory (2) Computer (3) Increase in the stock of unsold articles (4) Stock and share in joint stock company

Last Answer : (3) Increase in the stock of unsold articles Explanation: The gross national product is the sum total of all final goods and services produced by the people of one country in one year. The GNP is a ... net exports (Xn). Increase in the stock of unsold articles do not come under any of these heads.

While determining income the expenditure on which of the following items is not considered as investment ? (1) Construction of factory (2) Computer (3) Increase in the stock of unsold articles (4) Stock and share in joint stock company

Description : While determining income the expenditure on which of the following items is not considered as investment ? (1) Construction of factory (2) Computer (3) Increase in the stock of unsold articles (4) Stock and share in joint stock company

Last Answer : Increase in the stock of unsold articles

Acording to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes - (1) a fall in prices of output and resources (2) a fall in real gross National product and employment (3) a rise in real gross National product and investment (4) a rise in prices of output and resources

Description : Acording to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes - (1) a fall in prices of output and resources (2) a fall in real gross National product ... a rise in real gross National product and investment (4) a rise in prices of output and resources

Last Answer : (1) a fall in prices of output and resources Explanation: In 1936, John Maynard Keynes published the book "The General Theory of Employment, Interest and Money to explain the prolonged and ... at a below-full-employment equilibrium. Suppose that the economy is at the full-employment equilibrium.

According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes (1) a fall in prices of output and resources (2) a fall in real gross National product and employment (3) a rise in real gross National product and investment (4) a rise in prices of output and resources

Description : According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes (1) a fall in prices of output and resources (2) a fall in real gross National product and ... rise in real gross National product and investment (4) a rise in prices of output and resources

Last Answer :  a fall in prices of output and resources

In general, deficit financing can create inflation, but it can be checked if. A) Government expenditure increases the aggregate supply in the aggregate demand ratio B) All the investment is indicated as payment on national debt only C) Only aggregate demand is increased D) All of the above

Description : In general, deficit financing can create inflation, but it can be checked if. A) Government expenditure increases the aggregate supply in the aggregate demand ratio B) All the investment is indicated as payment on national debt only C) Only aggregate demand is increased D) All of the above

Last Answer : Answer: D

The balance of payments equals (a) The difference between household spending over earnings (b) The difference between government expenditure over its income © A measure of the value of economic transactions between residents of a country and rest of the world (d) The difference between inflation and unemployment.

Description : The balance of payments equals (a) The difference between household spending over earnings (b) The difference between government expenditure over its income © A measure of the value of economic ... a country and rest of the world (d) The difference between inflation and unemployment.

Last Answer : © A measure of the value of economic transactions between residents of a country and rest of the world

A mixed economy refers to an economic system where - (1) The economy functions with foreign collaboration (2) Only t he private sector operates under government control (3) Both the government and the private sectors operate sectors operate simultaneously (4) No foreign investment is allowed

Description : A mixed economy refers to an economic system where - (1) The economy functions with foreign collaboration (2) Only t he private sector operates under government control (3) Both the government and the private sectors operate sectors operate simultaneously (4) No foreign investment is allowed

Last Answer : (3) Both the government and the private sectors operate sectors operate simultaneously Explanation: Mixed economy is an economic system in which both the state and private sector direct the ... and that the government wields indirect influence over the economy through fiscal arid monetary policies.

A mixed economy refers to an economic system where (1) The economy functions with foreign collaboration (2) Only the private sector operates under government control (3) Both the government and the private sectors operate sectors operate simultaneously (4) No foreign investment is allowed

Description : A mixed economy refers to an economic system where (1) The economy functions with foreign collaboration (2) Only the private sector operates under government control (3) Both the government and the private sectors operate sectors operate simultaneously (4) No foreign investment is allowed

Last Answer : Both the government and the private sectors operate sectors operate simultaneously

A demand curve will not shift: (1) When only income changes (2) When only prices of substitute products change (3) When there is a change in advertisement expenditure (4) When only price of the commodity changes

Description : A demand curve will not shift: (1) When only income changes (2) When only prices of substitute products change (3) When there is a change in advertisement expenditure (4) When only price of the commodity changes

Last Answer : (4) When only price of the commodity changes Explanation: In economics, the demand curve is the graph depicting the relationship between the price of a certain commodity and the amount of it that ... only when there is a change in other determinants of demand, other than price of the commodity.

A demand curve will not shift: (1) When only income changes (2) When only prices of substitute products change (3) When there is a change in advertisement expenditure (4) When only price of the commodity changes

Description : A demand curve will not shift: (1) When only income changes (2) When only prices of substitute products change (3) When there is a change in advertisement expenditure (4) When only price of the commodity changes

Last Answer : When only price of the commodity changes

Which one of the following is not a method of measurement of National Income? (1) Value Added Method (2) Income Method (3) Investment Method (4) Expenditure Method

Description : Which one of the following is not a method of measurement of National Income? (1) Value Added Method (2) Income Method (3) Investment Method (4) Expenditure Method

Last Answer : (3) Investment Method Explanation: Primarily there are three methods of measuring national income. The methods are product method, income method and expenditure method. Product method is given by Dr. Alfred ... properties where evidence of rates is slight, such as hotels, cinema, car park and etc.

Which one of the following is not a method of measurement of National Income ? (1) Value Added Method (2) Income Method (3) Investment Method (4) Expenditure Method

Description : Which one of the following is not a method of measurement of National Income ? (1) Value Added Method (2) Income Method (3) Investment Method (4) Expenditure Method

Last Answer : Investment Method 

The investment by government to create socio-economic infrastructure is a. Induced investment b. Autonomous investment c. Incremental COR d. None of the above

Description : The investment by government to create socio-economic infrastructure is a. Induced investment b. Autonomous investment c. Incremental COR d. None of the above

Last Answer : b. Autonomous investment Autonomous investment is made by the government. Welfare rather than profit is the primary objective here.

Interaction of Multiplier and accelerator is known as (a) Investment Multiplier (b) Employment Multiplier (c) Super Multiplier (d) Dynamic Multiplier

Description : Interaction of Multiplier and accelerator is known as (a) Investment Multiplier (b) Employment Multiplier (c) Super Multiplier (d) Dynamic Multiplier

Last Answer : (c) Super Multiplier

National income accounting is the study of the income and expenditure of the entire - (1) family (2) state (3) economy (4) organisation

Description : National income accounting is the study of the income and expenditure of the entire - (1) family (2) state (3) economy (4) organisation

Last Answer : (3) economy Explanation: National Income Accounting is a set of principles and methods used to measure the income and production of a country. There are basically two ways of measuring ... the total of incomes derived from economic activity after allowance has been made for capital consumption.

National income accounting is the study of the income and expenditure of the entire (1) family (2) state (3) economy (4) organisation

Description : National income accounting is the study of the income and expenditure of the entire (1) family (2) state (3) economy (4) organisation

Last Answer : economy

Which of the following explains the term economic growth? a. Increase in per capita production b. Increase in per capita real income c. structural change in the economy d. all the above are right

Description : Which of the following explains the term economic growth? a. Increase in per capita production b. Increase in per capita real income c. structural change in the economy d. all the above are right

Last Answer : d. all the above are right There is no single definition that can define the term economic growth. However, there are various indicators that explain the term

Which of the following is not an investment expenditure in goods and services? (1) Expansion of the main plant of a company (2) Purchase of a house (3) Purchase of machinery (4) An increase in business in ventories

Description : Which of the following is not an investment expenditure in goods and services? (1) Expansion of the main plant of a company (2) Purchase of a house (3) Purchase of machinery (4) An increase in business in ventories

Last Answer : (2) Purchase of a house Explanation: Investment expenditure refers to the expenditure incurred either by an Individual or a firm or the government for the creation of new capital assets like ... purchase of house cannot be considered as investment expenditure as it may be for personal use.

Which of the following is not an investment expenditure in goods and services? (1) Expansion of the main plant of a company (2) Purchase of a house (3) Purchase of machinery (4) An increase in business inventories

Description : Which of the following is not an investment expenditure in goods and services? (1) Expansion of the main plant of a company (2) Purchase of a house (3) Purchase of machinery (4) An increase in business inventories

Last Answer :  Purchase of a house

The main feature of a capitalist economy is - (1) Administered prices (2) Public ownership (3) Economic planning (4) Private ownership

Description : The main feature of a capitalist economy is - (1) Administered prices (2) Public ownership (3) Economic planning (4) Private ownership

Last Answer : (4) Private ownership Explanation: Capitalism is an economic system that is based on private ownership of the means of production and the production of goods or services for profit. Other elements central to capitalism include capital accumulation and often competitive markets.

The main feature of a capitalist economy is (1) Administered prices (2) Public ownership (3) Economic planning (4) Private ownership

Description : The main feature of a capitalist economy is (1) Administered prices (2) Public ownership (3) Economic planning (4) Private ownership

Last Answer : Private ownership

The use of the multiplier: A)allows a seller to increase prices without the buyers' being aware of it.> B)determines totals for groups of items that are priced similarly.> C)allows the seller to change prices without having to issue new price sheets. D)aids a supplier in keeping an accurate record of how many customers are purchasing a group of items.

Description : The use of the multiplier: A)allows a seller to increase prices without the buyers' being aware of it.> B)determines totals for groups of items that are priced similarly.> C)allows the seller to ... )aids a supplier in keeping an accurate record of how many customers are purchasing a group of items.

Last Answer : C)allows the seller to change prices without having to issue new price sheets.

If millions of people moved their money from banks to credit unions over the course of a year, what impact would that have on the economy?

Description : If millions of people moved their money from banks to credit unions over the course of a year, what impact would that have on the economy?

Last Answer : answer:It would affect the profitability of big banks, but not necessarily have nay impact on consumers. If it was big enough, large banks would need to offer products to re-attract consumers, such as ... directly dependent on consumer demand. So there might be a bump up in car and house buying.

)A very high rise in National Income at current market prices and a low rise at constant prices reveals - (1) the high rate of growth in the economy at the current period (2) the increased production in the current period (3) the improper growth of the economy (4) the high rate of inflation prevailing in the economy

Description : )A very high rise in National Income at current market prices and a low rise at constant prices reveals - (1) the high rate of growth in the economy at the current period (2) the increased ... period (3) the improper growth of the economy (4) the high rate of inflation prevailing in the economy

Last Answer : (3) the improper growth of the economy Explanation: When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is ... not indicate increase in product or output, but is rather due to the rise in price level.

State which of the following is correct? The Consumer Price Index reflects - (1) the standard of living (2) the extent of inflation in the prices of consumer goods (3) the increasing per capita income (4) the growth of the economy

Description : State which of the following is correct? The Consumer Price Index reflects - (1) the standard of living (2) the extent of inflation in the prices of consumer goods (3) the increasing per capita income (4) the growth of the economy

Last Answer : (2) the extent of inflation in the prices of consumer goods Explanation: A consumer price index (CPI) measures changes in the price level of consumer goods and services purchased by households ... , pensions, for regulating prices and for deflating monetary magnitudes to show changes in real values.

State which of the following is correct ? The Consumer Price Index reflects : (1) the standard of living (2) the extent of inflation in the prices of consumer goods (3) the increasing per capita income (4) the growth of the economy

Description : State which of the following is correct ? The Consumer Price Index reflects : (1) the standard of living (2) the extent of inflation in the prices of consumer goods (3) the increasing per capita income (4) the growth of the economy

Last Answer : the extent of inflation in the prices of consumer goods

A very high rise in National Income at current market prices and a low rise at constant prices reveals (1) the high rate of growth in the economy at the current period (2) the increased production in the current period (3) the improper growth of the economy (4) the high rate of inflation prevailing in the economy

Description : A very high rise in National Income at current market prices and a low rise at constant prices reveals (1) the high rate of growth in the economy at the current period (2) the increased production ... (3) the improper growth of the economy (4) the high rate of inflation prevailing in the economy 

Last Answer :  the high rate of inflation prevailing in the economy

On the basis of the Keynesian model of output determination, a multiplier of 3 implies that (a) An increase in consumption by `3 will result in an increase in investment by Re. 1 (b) An increase in investment by Re. 1 will result in an increase in consumption by `3 (c) An increase in investment by Re. 1 will result in an increase in consumption by `2 (d) An increase in investment by Re. 1 will result in an increase in consumption by Re. 1

Description : On the basis of the Keynesian model of output determination, a multiplier of 3 implies that (a) An increase in consumption by `3 will result in an increase in investment by Re. 1 (b) An increase in ... 2 (d) An increase in investment by Re. 1 will result in an increase in consumption by Re. 1

Last Answer : (c) An increase in investment by Re. 1 will result in an increase in consumption by `2 

Donations received for the special purpose will be taken to the– (A) Income and Expenditure Account (B) Assets side of the Balance Sheet (C) Liabilities side of the Balance Sheet (D) Receipts and Payments Account

Description : Donations received for the special purpose will be taken to the– (A) Income and Expenditure Account (B) Assets side of the Balance Sheet (C) Liabilities side of the Balance Sheet (D) Receipts and Payments Account

Last Answer : Answer: Liabilities side of the Balance Sheet

……………. States that rapid growth of per capita income will be associated with a reduction in poverty. (a) The trickle down theory ; (b) Multiplier theory ; (c) Malthus population theory ; (d) None

Description : ……………. States that rapid growth of per capita income will be associated with a reduction in poverty. (a) The trickle down theory ; (b) Multiplier theory ; (c) Malthus population theory ; (d) None

Last Answer : (a) The trickle down theory ;

The existence of a Parallel Economy or Black Money - (1) makes the economy more competitive (2) makes the monetary policies less effective (3) ensures a better distribution of income and wealth (4) ensures increasing productive investment

Description : The existence of a Parallel Economy or Black Money - (1) makes the economy more competitive (2) makes the monetary policies less effective (3) ensures a better distribution of income and wealth (4) ensures increasing productive investment

Last Answer : (2) makes the monetary policies less effective Explanation: In India, Black money refers to funds earned on the black market, on which income and other taxes has not been paid. Black money ... a policy. So, in nutshell, the existence of parallel economy erodes the effectiveness of monetary policies.

The existence of a parallel economy or Black Money - (1) makes the economy more competitive (2) makes the monetary policies less effective (3) ensures a better distribution of income and wealth (4) ensures increasing productive investment

Description : The existence of a parallel economy or Black Money - (1) makes the economy more competitive (2) makes the monetary policies less effective (3) ensures a better distribution of income and wealth (4) ensures increasing productive investment

Last Answer : (2) makes the monetary policies less effective Explanation: The existence of black money is injurious not just for tax revenues. It distorts the systematic resource allocation process and upsets the ... . So the existence of black money erodes the very rationale of growth behind monetary policies.

The existence of a Parallel Economy or Black Money (1) makes the economy more competitive (2) makes the monetary policies less effective (3) ensures a better distribution of income and wealth (4) ensures increasing productive investment

Description : The existence of a Parallel Economy or Black Money (1) makes the economy more competitive (2) makes the monetary policies less effective (3) ensures a better distribution of income and wealth (4) ensures increasing productive investment

Last Answer : makes the monetary policies less effective

The best Index of Economic Development is provided by: (1) Growth in Percapita Real Income from year to year. (2) Growth in National Income at Current Prices. (3) Growth in savings ratio. (4) Improvement in the Balance of Payments Position.

Description : The best Index of Economic Development is provided by: (1) Growth in Percapita Real Income from year to year. (2) Growth in National Income at Current Prices. (3) Growth in savings ratio. (4) Improvement in the Balance of Payments Position.

Last Answer : (1) Growth in Percapita Real Income from year to year. Explanation: Per capita Gross National Product (GNP) is the best index of development. It can be derived by dividing the GNP of a ... its world development report 1998, classified the countries in the world on the bases of per capita GNP.

The best measure to assess a country's economic growth is - (1) per capita income at constant prices (2) per capita income at current prices , (3) gross domestic product at current prices (4) gross national product at current prices

Description : The best measure to assess a country's economic growth is - (1) per capita income at constant prices (2) per capita income at current prices , (3) gross domestic product at current prices (4) gross national product at current prices

Last Answer : (1) per capita income at constant prices Explanation: Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period ... the aggregate (such as GDP or Gross National Income) and dividing it by the total population.

The best Index of Economic Development is provided by: (1) Growth in Percapita Real Income from year to year. (2) Growth in National Income at Current Prices. (3) Growth in savings ratio. (4) Improvement in the Balance of Payments Position.

Description : The best Index of Economic Development is provided by: (1) Growth in Percapita Real Income from year to year. (2) Growth in National Income at Current Prices. (3) Growth in savings ratio. (4) Improvement in the Balance of Payments Position.

Last Answer : Growth in Percapita Real Income from year to year.