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 : 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 : 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 : Which of the following cannot be treated as revenue expenditure? A. Cost of goods purchased for resale. B. Wages paid for the erection of plant and machinery. C. Obsolescence cost. D. Expenses incurred by way of repairs of existing assets which do not in any way add to their earning capacity.
Last Answer : B. Wages paid for the erection of plant and machinery.
Description : What are Capital goods? a) Goods used for consumption in the production process b) Goods such as tools, machinery, etc which are used to create final consumer goods c) Goods and services that are consumed fully when purchased by the consumers d) None of the above
Last Answer : : b) Goods such as tools, machinery, etc which are used to create final consumer goods
Description : What are consumption goods? a) Goods used for consumption in the production process b) Goods such as tools, machinery, etc which are used to create final consumption goods c) Goods and services that are consumed fully when purchased by the consumers d) None of the above
Last Answer : : c) Goods and services that are consumed fully when purchased by the consumers
Description : The upper limit of investment in plant and machinery for small-scale industries has been fixed currently at - (1) Rs. 35 lakhs (2) Rs. 45 lakhs (3) Rs. 60 lakhs (4) Rs. 1 crore
Last Answer : (4) Rs. 1 crore Explanation: The upper limit of investment in plant and machinery for small-scale industries has been fixed at Rs. one crore.
Description : The upper limit of investment in plant and machinery for smallscale industries has been fixed currently at (1) 35 lakhs (2) 45 lakhs (3) 60 lakhs (4) 1 crore
Last Answer : 1 crore
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 : 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 : 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 : Plant arid machinery are - (1) Producers' goods (2) Consumers' goods (3) Distributors' goods (4) Free goods
Last Answer : (1) Producers' goods Explanation: Plant and machinery are Producers' goods. Together with stocks and work in progress, these goods are collectively termed 'Capital'.
Description : Plant and machinery are (1) Producers’ goods (2) Consumers’ goods (3) Distributors’ goods (4) Free goods
Last Answer : Producers’ goods
Description : Which of the following is not required while computing Gross National Product (GNP)? (1) Net foreign investment (2) Private investment (3) Per capita income of citizens (4) Purchase of goods by government
Last Answer : (3) Per capita income of citizens Explanation: Gross National Product (GNP) is the market value of all products and services produced in one year by labour and property supplied by the ... measures the value of goods and services that the country's citizens produced regardless of their location.
Description : Which of the following is not required while computing Gross National Product (GNP) ? (1) Net foreign investment (2) Private investment (3) Per capita income of citizens (4) Purchase of goods by government
Last Answer : Per capita income of citizens
Description : Who defined investment as "the construction of a new capital asset like machinery or factory building"? (1) Hansen (2) J.M. Keynes (3) Harrod (4) J.R. Hicks
Last Answer : (2) J.M. Keynes Explanation: Investment expenditure refers to the creation of new assets i.e. an addition to the stock of existing capital assets. According to Keynes investment demand depends upon ... the rate of interest (IR). Investment demand decreases with the increase in the rate of interest.
Description : Who defined investment as “the construction of a new capital asset like machinery or factory building” ? (1) Hansen (2) J.M. Keynes (3) Harrod (4) J.R. Hicks
Last Answer : J.M. Keynes
Description : The ordinary examination of financial statements is not primarily designed to disclose defalcations and other irregularities although their discovery may result. Normal audit procedures are more likely to ... . Failure to record cash receipts for services rendered. d. Forgeries on company checks
Last Answer : Theft of inventories
Description : The ordinary examination of financial statements is not primarily designed to disclose defalcations and other irregularities although their discovery may result. Normal audit procedures are more likely to ... receipts for services rendered. c. Forgeries on company checks. d. Theft of inventories
Description : Depreciation is loss in value of _______. (1) Final goods (2) Machinery (3) Capital stock (4) Stock of inventory
Last Answer : (2) Machinery Explanation: The term depreciation represents loss or diminution in the value of an asset consequent upon wear and tear, obsolescence, effluxion of time or permanent fall in market value ... furniture, vehicles, plant etc. The wear and tear is general but primary cause of depreciation.
Description : Depreciation is loss in value of ________ (1) Final goods (2) Machinery (3) Capital stock (4) Stock of inventory
Last Answer : Machinery
Description : As per ICDS-2, inventories mean a) Items held for sale in ordinary course of business b) Process of production for sale c) Material or supplies to be consumed in production process or in services d) All of the above
Last Answer : d) All of the above
Description : In a business, raw materials, components, work in progress and finished goods are jointly regarded as - (1) capital stock (2) inventory (3) investment (4) net worth
Last Answer : (2) inventory Explanation: Inventory refers to raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business's assets that are ... of the primary sources of revenue generation and subsequent earnings for the company's shareholders/owners.
Description : 6. Assume that Potential Real GDP equals $10,000. National Income is therefore $10,000. Of this, consumers will pay $2,000 in taxes, save $1,000, and spend $7,000 on consumer goods. Business Investment ... . budget deficit of $1000 c. budget surplus of $1000 d. budget deficit of $2000 C C A A C
Last Answer : c. budget surplus of $1000
Description : In a business, raw materials, components, work in progress and finished goods are jointly regarded as (1) capital stock (2)inventory (3) investment (4)net worth
Last Answer : inventory
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 : 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.
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 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 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 : 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
Last Answer : Price theory
Description : The difference between the GNP and the NNP is equal to the - (1) consumer expenditure on durable goods (2) direct tax revenue (3) indirect tax revenue (4) capital depreciation
Last Answer : (4) capital depreciation Explanation: Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of ... equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
Description : The difference between the GNP and the NNP is equal to the (1) consumer expenditure on durable goods (2) direct tax revenue (3) indirect tax revenue (4) capital depreciation
Last Answer : capital depreciation
Description : 6. Budgeted sales of X for March are 18000 units. At the end of the production process for X, 10% of production units are scrapped as defective. Opening inventories of X for March are ... have successfully passed the quality control check. The production budget for X for March, in units is:
Last Answer : (d) 16,000
Description : When aggregate supply exceeds aggregate demand - (1) unemployment falls (2) prices rise (3) inventories accumulate (4) unemployment develops
Last Answer : (3) inventories accumulate Explanation: Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to ... Either way -there is a tendency for output to move closer to the current level of demand.
Description : Backward bending supply curve belongs to which market? (1) Capital (2) Labour (3) Money (4) Inventories
Last Answer : (2) Labour Explanation: In economics, backward bending supply curve is related to labour. Also known as backward-bending supply curve of labour, This curve models a situation where workers choose to ... It shows how the change in real wage rates affects the number of hours worked by employees.
Last Answer : Labour
Description : When aggregate supply exceeds aggregate demand (1) unemployment falls (2) prices rise (3) inventories accumulate (4) unemployment develops
Last Answer : inventories accumulate
Description : A machinery is purchased for Rs. 3,00,000 and Rs. 50,000 is spent on its installation. Rs. 5,000 is spent on fuel. What will be the amount of capital expenditure ? (A) Rs. 3,00,000 (B) Rs. 3,50,000 (C) Rs. 3,55,000 (D) None of these
Last Answer : Answer: Rs. 3,50,000
Description : What does a Leasing Company provide? (1) Machinery and capital equipment on hire (2) Legal guidance in establishing an enterprise (3) Office accommodation on hire (4) Technical consultancy and experts for a fee
Last Answer : (1) Machinery and capital equipment on hire Explanation: Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, ... . Leasing provides opportunities to use available money to operate assets that can make more money over time.
Description : What does a Leasing Company provide ? (1) Machinery and capital equipment on hire (2) Legal guidance in establishing an enterprise (3) Office accommodation on hire (4) Technical consultancy and experts for a fee
Last Answer : Machinery and capital equipment on hire
Description : Which one of the following is a developmental expenditure? (1) Irrigation expenditure (2) Civil administration (3) Debt services (4) Grant-in-aid
Last Answer : (1) Irrigation expenditure Explanation: Public expenditure whether plans or non-plan or capital or revenue is classified into developmental and non-developmental expenditure. The expenditure ... relating to general administration, police, defense, judiciary etc. is nondevelopmental expenditure.
Description : Which one of the following is a developmental expenditure? (1) Irrigation expenditure (2) Civil administration (3) Debt services (4) Grant–in–aid
Last Answer : Irrigation expenditure
Description : Pick out the wrong statement. (A) The annual depreciation rate for machinery and equipments in a chemical process plant is about 10% of the fixed capital investment (B) Annual depreciation rate ... chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR)
Last Answer : (D) In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR)
Description : Cost of inventories includes A. Direct Material + Direct Expenses B. Direct Labour + Direct Expenses C. All costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition D. Direct material only
Last Answer : C. All costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition
Description : Disinvestments is - (1) offloading of shares of privates companies to government (2) offloading of government shares to private companies (3) increase in investment (4) closing down of business concerns
Last Answer : (2) offloading of government shares to private companies Explanation: Disinvestment is a process where Government sells its equity holding to private sectors. In other ways it is a ... process where private parties are given shareholding in Government undertakings either wholly or partially.
Description : Disinvestements is (1) offloading of shares of privates companies to government (2) offloading of government shares to private companies (3) increase in investment (4) closing down of business concerns
Last Answer : offloading of government shares to private companies
Description : Goods which are meant either for consumption or for investment are called - (1) Final goods (2) Giffen goods (3) Inferior goods (4) Intermediate goods
Last Answer : (1) Final goods Explanation: All goods which are meant either (i) for consumption by consumers or (ii) for investment by firms are called final goods. They are finished goods, meant for final ... stages of production. Cars, television sets, cloth, food, machinery, equipments etc. are final goods.