Description : Micro-economics is also called : (1) Income theory (2) Investment theory (3) Price theory (4) Expenditure theory
Last Answer : Price theory
Description : Price theory is also known as - (1) Macro Economics (2) Development Economics (3) Public Economics (4) Micro Economics
Last Answer : (4) Micro Economics Explanation: Price theory is also known as micro economics and is concerned with the economic behaviour of individual consumers, producers and resource owners. Prof. Leftwich ... owners to business firms with their evaluation and with their allocation among alternative uses."
Description : Price theory is also known as (1) Macro Economics (2) Development Economics (3) Public Economics (4) Micro Economics
Last Answer : Micro Economics
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 : (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 ... of the U.S. money supply, and MO as a measure of the U.S. monetary base.
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
Description : Which of the following issue relates to micro-economics (a) Impact of crude price hike on inflation (b) Impact of change in bank rate on bank saving and investment (c) Impact of Information technology on economic growth (d) Impact of shortage of wheat production on wheat prices
Last Answer : (d) Impact of shortage of wheat production on wheat prices
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.
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.
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.
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
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
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
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.
Last Answer : When only price of the commodity changes
Description : The main emphasis of Keynesian economics is on - (1) Expenditure (2) Exchange (3) Foreign trade (4) Taxation
Last Answer : (1) Expenditure Explanation: Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure.
Description : The main emphasis of Keynesian economics is on (1) Expenditure (2) Exchange (3) Foreign trade (4) Taxation
Last Answer : Expenditure
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.
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
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.
Description : Gross Profit means - (1) Total investment over total saving (2) Changes in methods of production (3) Changes in the form of business organisation (4) Total receipts over total expenditure
Last Answer : (4) Total receipts over total expenditure Explanation: In accounting, gross profit or sales profit is the difference between revenue and the cost of making a product or providing a service, before deducting ... . Gross profit = Net sales (total receipts) - Cost of goods sold (total expenditure).
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
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
Description : Gross Profit means (1) Total investment over total saving (2) Changes in methods of production (3) Changes in the form of business organisation (4) Total receipts over total expenditure
Last Answer : Total receipts over total expenditure
Description : The principle of maximum social advantage is the basic principle of - (1) Micro Economics (2) Macro Economics (3) Fiscal Economics (4) Environmental Economics
Last Answer : (3) Fiscal Economics Explanation: The 'Principle of Maximum Social Advantage', introduced by British economist Hugh Dalton, is the fundamental principle of Public Finance which implies that all ... problems related to government taxation and spending, it comes under the domain of fiscal economics.
Description : The terms "Micro Economics" and "Macro Economics" were coined by - (1) Alfred Marshall (2) Ragner Nurkse (3) Ragner Frisch (4) J.M. Keynes
Last Answer : (3) Ragner Frisch Explanation: The terms microeconomics and macroeconomics were coined by Professor Ragnar Frisch of Oslo University for the first time in 1933 and since then they gained popularity and ... number of significant advances in the field of economics and coined a number of new words.
Description : Which is the basically a decision making science ? a. Farm management b. Macro economics c. Micro economics d. None of these
Last Answer : a. Farm management
Description : The terms “Micro Economics” and “Macro Economics” were coined by (1) Alfred Marshall (2) Ragner Nurkse (3) Ragner Frisch (4) J.M. Keynes
Last Answer : Ragner Frisch
Description : The principle of maximum social advantage is the basic principle of (1) Micro Economics (2) Macro Economics (3) Fiscal Economics (4) Environmental Economics
Last Answer : Fiscal Economics
Description : Consumption function expresses the relationship between consumption and - (1) savings (2) income (3) investment (4) price
Last Answer : (2) income Explanation: The consumption function is a mathematical formula laid out by famed economist John Maynard Keynes. The formula was designed to show the relationship between real disposable ... being what Keynes considered the most important determinant of short-term demand in an economy.
Description : According to Acceleration principle investment depends on change in the level of------ (a) rate of interest. (b) level of income. © price (d) saving.
Last Answer : (b) level of income.
Description : .Induced investment depends on (a) Price level and rate of interest (b) Level of income and rate of interest © Level of employment and wage rate (d) Price level and wage rate.
Last Answer : (b) Level of income and rate of interest
Description : Consumption function expresses the relationship between consumption and (1) savings (2) income (3) investment (4) price
Last Answer : income
Description : Micro economics theory deals with (a) Economic behavior of individual economic decision making units; (b) Economy as a whole ; (c) Trade relations ; (d) Economic growth of the society
Last Answer : (a) Economic behavior of individual economic decision making units;
Description : A low interest policy is also known as – (1) cheap money policy (2) income generating (3) dear money policy (4) investment policy
Last Answer : (1) cheap money policy Explanation: Cheap money policy involves loan or credit with a low interest rate, or the setting of low interest rates by the central bank of the country. Cheap money is ... , but bad for investors. Cheap money policy was one of the primary catalysts of the 2008 recession.
Description : A low interest policy is also known as : (1) cheap money policy (2) income generating (3) dear money policy (4) investment policy
Last Answer : cheap money policy
Description : What is the term in economics for the consumption of fixed capital? a) Investment b) Value added c) Production flow d) Depreciation
Last Answer : d) Depreciation
Description : Micro environment is also called as ________. A. general environment. B. operating environment. C. economics environment. D. political environment.
Last Answer : B. operating environment.
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.
Description : A siuation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as - (1) Absolute Poverty (2) Relative Poverty (3) Urban Poverty (4) Rural Poverty
Last Answer : (1) Absolute Poverty Explanation: Absolute poverty is defined as a situation in which the individual's basic needs are not covered, in other words, there is a lack of basic goods and services ( ... shelter, education and information. It depends not only on income but also on access to services."
Description : Which one of following represents the Savings of the Private Corporate Sector? (1) Dividends paid to shareholders (2) Total profits of a company (3) Undistributed profits (4) Excess of income over expenditure
Last Answer : (3) Undistributed profits Explanation: For private corporate sector, retained profits adjusted for non operating surplus/deficit is considered as its Net Saving. Retained profits are those ... commitments to depreciation provision for various fixed assets, debts, government and to shareholders.
Description : An indifference curve measures the same level of - (1) Output from two factors (2) Satisfaction from two commodities (3) Satisfaction from Income and Capital (4) Satisfaction from expenditure and savings
Last Answer : (2) Satisfaction from two commodities Explanation: An indifference curve is a locus of combinations of goods which derive the same level of satisfaction. so that the consumer is indifferent ... of various points showing different combinations of two goods providing equal utility to the consumer
Description : Which of the following results by dividing national income by size of population? (1) Per capita income (2) Subsistence level (3) Subsistence expenditure- (4) Per capita production
Last Answer : (1) Per capita income Explanation: Per capita income or average income or income per person is a measure of mean income within an economic aggregate, such as a country or city. It is calculated by ... in the aggregate (such as GDP or Gross National Income) and dividing it by the total population.
Description : Whch of the following curve describes the variation of household expenditure on a particular good with respect to household income? (1) Demand curve (2) Engel curve (3) Great Cats by curve (4) Cost curve
Last Answer : (2) Engel curve Explanation: In microeconomics, an Engel curve describes how household expenditure on a particular good or service varies with household income. The curve is named after ... was the first to investigate this relationship between goods expenditure and income systematically in 1857.
Description : Which one of the following is not a method for computing GNP? (1) Income Approach (2) Expenditure Approach (3) Savings Approach (4) Value Added Approach
Last Answer : (1) Income Approach Explanation: Gross National Product (GNP) can be defined as an economic statistic which includes Gross Domestic Product, plus any income earned by the residents from investments ... foreign countries by the residents of a country - income earned by nonresidents in that country.
Description : Which one of the following is not a method of estimating National Income? (1) Expenditure method (2) Product method (3) Matrix method (4) Income method
Last Answer : (3) Matrix method Explanation: The matrix method is a structural analysis method used as a fundamental principle in many applications in civil engineering. The method is carried out, using ... of measuring national income. The methods are product method, income method and expenditure method.
Description : Which of the following is not included in the National Income? (1) Imputed rent of owner-occupied houses (2) Government expenditure on making new bridges (3) Winning a lottery (4) Commission paid to an agent for sale of house
Last Answer : (3) Winning a lottery Explanation: National income is the total value a country's final output of all new goods and services produced in one year. Transfer payments are not a ... pensions, charity, scholarships etc. Privatesector transfers include charitable donations and prizes to lottery winners.
Description : The functional relationship between income and consumption expenditure is explained by - (1) Consumer' Surplus (2) Law of Demand (3) Law of Supply (4) Keynes's psychological law of consumption
Last Answer : (4) Keynes's psychological law of consumption Explanation: Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great ... consumption as their income increases but not by as much as the increase in the income."
Description : What is "book-building"? (1) Preparing the income and expenditure ledgers of a company (book-keeping) (2) Manipulating the profit and loss statements of a company (3) A process of inviting subscriptions to a public offer of securities, essentially through a tendering process (4) Publishers' activity
Last Answer : (3) A process of inviting subscriptions to a public offer of securities, essentially through a tendering process Explanation: Book building refers to the process of generating, capturing, and recording investor ... a base price and a band within which the investor is allowed to bid for shares.
Description : A tax is characterized by horizontal equity if its liability is - (1) proportional to the income of tax payers (2) similar for tax payers in similar circumstances (3) proportional to the expenditure of tax payers (4) the same for every tax payer
Last Answer : (1) proportional to the income of tax payers Explanation: The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual's ability-to-pay. The idea of ... equity suggests it is fair for people of equal ability to pay the same amount in taxes.
Description : The method of calculating the national income by the product method is otherwise known as : (1) Income method (2) Value added method (3) Expenditure method (4) Net output method
Last Answer : (4) Net output method Explanation: Primarily there are three methods of measuring national income. Which method is to be employed depends on the availability of data and purpose. The methods ... account. In this method, National Output = National Expenditure (Aggregate Demand) = National Income.