Description : Personal disposable income is equal to .. (a) Wages and salaries + Dividends paid at home - Personal income tax (b) Wages and salaries + Dividends paid at home + Factor income ... + Dividends paid at home + Factor income received from abroad - Transfers from government - Personal income tax.
Last Answer : (c) Wages and salaries + Dividends paid at home + Factor income received from abroad + Transfers from government – Personal income tax.
Description : The slope of the consumption curve connotes (a) Average propensity to save ; (b) Marginal Propensity to consume ; (c) Marginal propensity to save ; (d) Level of consumption in the economy.
Last Answer : (b) Marginal Propensity to consume ;
Description : Which of these is/are not included in net domestic product at factor cost. (a) Wages or compensation of employees ; (b) Rent, interest, profits or operating surplus; (c) Mixed income ; (d) None
Last Answer : (d) None
Description : Consumption demand does not depend upon the level of (a) Income ; (b) Propensity to consume ; (c) Consumer spending ; (d) Marginal efficiency of investment.
Last Answer : (d) Marginal efficiency of investment.
Description : As the number of investments made by a firm increases, its internal rate of return - (1) declines due to diminishing marginal productivity. (2) declines because the market rate of interest will ... the firm for the current consumption foregone. (4) increases because the level of savings will fall.
Last Answer : (3) increases to compensate the firm for the current consumption foregone. Explanation: Internal rates of return are commonly used to evaluate the desirability of investments or projects. The higher a ... of return is greater than an established minimum acceptable rate of return or cost of capital.
Description : As the number of investments made by a firm increases, its internal rate of return (1) declines due to diminishing marginal productivity. (2) declines because the market rate of interest will fall ... firm for the current consumption foregone. (4) increases because the level of savings will fall.
Last Answer : increases to compensate the firm for the current consumption foregone.
Description : An economy is in equilibrium when - (1) planned consumption exceeds planned saving (2) planned consumption exceeds planned investment (3) intended saving equals intended investment (4) intended investment exceeds intended savings
Last Answer : (3) intended saving equals intended investment Explanation: In economics, economic equilibrium is a state of the world where economic forces are balanced and in the absence of external influences ... and intended investment. An economy is in equilibrium when total savings equal total investment.
Description : If the actual rate of unemployment exceeds to natural rate of unemployment then (a) Actual output of the economy will fall below its potential ; (b) Production will increase more than potential ; (c) Consumption of goods decreases; (d) Both (a) and (c) above.
Last Answer : (d) Both (a) and (c) above.
Description : In free economy the decision about investment, saving and consumption are decided by (a) Price mechanism ; (b) Central bank ;(c) Planning Commission ;(d) Finance budget
Last Answer : (a) Price mechanism
Description : In a market economy equilibrium price is reached at (a) Point of interaction of aggregate demand and aggregate supply curve; (b) At the top of demand curve ; (c) Midpoint of demand curve ; (d) Midpoint of supply curve
Last Answer : (a) Point of interaction of aggregate demand and aggregate supply curve;
Description : Personal income equals personal disposable income (Yd) plus (a) Personal savings ; (b) Transfers from government ; (c) Personal income taxes ; (d) Dividend payments
Last Answer : (c) Personal income taxes ;
Description : In a closed economy (a) GDP=GNP ; (b) GDP>GNP ; (c) GDP
Last Answer : (a) GDP=GNP ;
Description : Which of these items are excluded in the computation of National Income under value added method? (a) Own acquired fixed assets by the Government enterprises, Govt. and household; (b) Production for self-consumption ; (c) Imputed rent for own occupied house ; (d) All the three
Last Answer : (d) All the three
Description : Decreases in price of a product results in increased consumption of the product as the product becomes cheaper compared to other products. This effect is known as (a) Substitution effect ; (b) Income effect ; (c) Diminishing marginal utility concept; (b) Law of diminishing returns
Last Answer : (a) Substitution effect ;
Description : The relationship between aggregate consumption expenditure and aggregate income of household sector is known as ………………………. function. (a) Consumption ; (b) Saving ; (c) Expenditure ; (d) Income
Last Answer : (a) Consumption
Description : If both the disposal income as well as number of suppliers of a product rises, the equilibrium (a) Price remain same ; (b) Price will go up ; (c) Quantity will go up ; (d) Quantity will go down
Last Answer : (c) Quantity will go up ;
Description : If there is simultaneous fall in consumers disposal income as well number of suppliers of a product in the market, the (a) Equilibrium quantity will decrease ; (b) Equilibrium price will decrease ; (c) Equilibrium price will go up ; (d) Equilibrium quantity will increase
Last Answer : (a) Equilibrium quantity will decrease ;
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 : 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 : Which of the following transactions is included in the current account balance of the Balance of payments statement? (a) Foreign direct investments. ; (b) Portfolio investments.; (c) External commercial borrowings. ; (d) Dividends earned on portfolio investments
Last Answer : (d) Dividends earned on portfolio investments
Description : In a pure monopoly firm a firm can make abnormal profit at the long run equilibrium level due to (a) Price discrimination;(b)Cost effectiveness ; (c) Banned entry of new firms ; (d) Sales promotion
Last Answer : (c) Banned entry of new firms ;
Description : If a firms cost of raw material increases then (a) Market price of the final product will also increase (b) Equilibrium level of quantity also increases ; (c) Marginal cost curve will shift upward (d) Marginal cost curve will shift downward
Last Answer : ; (c) Marginal cost curve will shift upward
Description : …….. is the price at which demand for a commodity is equal to its supply (a) Normal price ; (b) Equilibrium price ; (c) Short run price ; (d) Secular price
Last Answer : ; (b) Equilibrium price ;
Description : Under perfect market conditions a firm is said to be in equilibrium where (a) Total output is equal to total demand ; (b) Profit is the maximum; (c) Where the total revenue is maximum ; (d) Where total average cost is the minimum
Last Answer : (b) Profit is the maximum;
Description : Under perfect market conditions an Industry is said to be in equilibrium where (a) Total output is equal to total demand ; (b) Profit is maximum (c) Where the total revenue is maximum ; (d) Where total average cost is the minimum
Last Answer : (a) Total output is equal to total demand ;
Description : In short run a monopolistic competition firm will be in equilibrium where (a) MR = curve intersect SMC curve from above (b) MR curve intersect SMC curve from below (c) MC = AR ; (d) MR curve intersect SMC from below and P is equal to or more than AVC
Last Answer : ; (d) MR curve intersect SMC from below and P is equal to or more than AVC
Description : Which of the following statement is inconsistent with Say's Law (a) The economy has flexible wages and prices. (b) The economy's level of investment solely depends on the level of income. © The ... produce at full employment level of output. (d) The economy has an environment of laissez faire .
Last Answer : (b) The economy’s level of investment solely depends on the level of income.
Description : If an economy is working at a point left to PPF curve it shows that……… (a) The economy is working at less than the full employment level ; (b) The economy is at full employment level ; (c) The economy is country is faced with excess production ; (d) There is glut of imports
Last Answer : (a) The economy is working at less than the full employment level ;
Description : Which of these statement is true about production possibility curve (PPC/PPF) (a) It shows various combinations of two goods which yield same level of satisfaction (b) It shows various combination of two ... (d) It shows various combination of two goods which an economy can produce with a given time
Last Answer : (b) It shows various combination of two goods which an economy can produce with a given amount of resources
Description : The marginal propensity to consume is equal to (a) Total spending/Total consumption (b) Total consumption/ Total income. © Change in consumption/ Change in income (d) Change in consumption/ Change in savings.
Last Answer : © Change in consumption/ Change in income
Description : Which of the following is not a method of measurement of price elasticity of demand in economics (a) Total Outlay ; (b) Total savings ; (c) Point method ; (d) Arc method
Last Answer : ; (b) Total savings
Description : Which of these affects the demand for money? (a) Real income ; (b) Price level ; (c) Rate of interest ; (d) All the three
Description : Financial interrelation ratio is equal to (a) Total issues / National income ; (b) Primary issues / Net capital formation; (c) Total issues / Net capital formation ; (d) Total stock of financial assets/Stock of fiscal assets
Last Answer : (c) Total issues / Net capital formation
Description : The net factor income earned within the domestic territory of a country must be equal to (a) Net Domestic Product at factor cost ; (b) Net Domestic Product at market price; (c) Net National Product at market price ; (d) Personal income.
Last Answer : (a) Net Domestic Product at factor cost ;
Description : Net factor income from abroad is equal to (a) NNP at market price – NDP at market price ; (b) NDP at market prices – Indirect taxes + Subsidies ; (c) NDP at factor cost + Depreciation ; (d) NNP at market prices + Depreciation
Last Answer : (a) NNP at market price – NDP at market price ;
Description : A levy of excise duty on consumption of an item consumed will .. (a) Induce suppliers to pump in more quantity in the market; (b) Result in fall in the consumption of the commodity ... by the consumer ; (c) Lead to inflationary conditions ; (d) Place the consumer on lower indifference curve
Last Answer : (d) Place the consumer on lower indifference curve
Description : Which of these will have highly inelastic supply curve (a) Perishable goods ; (b) Consumer durables goods; (c) Items of elite class consumption ; (d) All the three
Last Answer : (a) Perishable goods ;
Description : Price elasticity of demand is not affected by (a) Nature of the commodity ; (b) Availability of close substitute; (c) Cost of production ; (d) Consumption habits
Last Answer : (c) Cost of production ;
Description : If the consumption of a product can be postponed for the time being (a) The demand for the product will be inelastic (b) The demand for the product will be relatively elastic (c) The demand for the product will be perfectly elastic (d) The demand for the product will be perfectly inelastic
Last Answer : (b) The demand for the product will be relatively elastic
Description : Price elasticity of demand of a product will be more inelastic if (a) It forms a major part of consumer house hold budget; (b) It forms a very small part of consumers household budget; (c) It is inferior ; (d) It is for mass consumption
Last Answer : (b) It forms a very small part of consumers household budget;
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
Description : By definition, the marginal propensity to consume (a) Equals ΔC/ΔYd ; (b) Is the behavioral coefficient c in the equation C = a + cYd; (c) Is the slope of the consumption function ; (d) All the above
Last Answer : (d) All the above
Description : GDP at market prices is the sum of Consumption, Investment, Government Spending and Net Exports. „Net‟ exports is (a) Gross exports minus depreciation ; (b) Exports minus imports ; (c) Gross exports earnings minus capital inflow ; (d) Export minus imports of merchandize
Last Answer : (b) Exports minus imports ;
Description : Economic efficiency means (a) Production of goods of mass consumption at lower cost; (b) Production of goods and services for those who have purchasing power; (c) Getting greatest satisfaction from available resources ; (d) Full employment of working force
Last Answer : (c) Getting greatest satisfaction from available resources
Description : The opportunity cost of capital investment is (a) Sacrifice of current consumption ; (b) More consumption on luxury items; (c) Lower capital growth in future ; (d) Wastage of Resources
Last Answer : (a) Sacrifice of current consumption
Description : The opportunity cost of consumption is (a) Lack of capital formation for future ; (b) Greater investment ; (c) Full employment ; (d) Deflation
Last Answer : (a) Lack of capital formation for future ;
Description : What will happen to the equilibrium price and quantity of peanut butter if peanuts increase in price and the price of jelly decreases? (a) the equilibrium price and quantity increase (b) the ... ) the equilibrium price will rise and the equilibrium quantity will be indeterminate (d) None of above
Last Answer : (c) the equilibrium price will rise and the equilibrium quantity will be indeterminate
Description : Which of the following is correct for the price ceiling which is set below the market s equilibrium price? (a) quantity demanded exceeds quantity supplied at the set price; (b) quantity demanded is less than quantity ... the set price ; (c) at the set price there is a surplus ; (d) None of above
Last Answer : (a) quantity demanded exceeds quantity supplied at the set price;
Description : Which of the following is correct for a price floor set above the equilibrium price? (a) quantity supplied is less than quantity demanded at the set price.; (b) at the set price there will be a shortage; (c) quantity supplied exceeds quantity demanded at the set price ; (d) None of above
Last Answer : (c) quantity supplied exceeds quantity demanded at the set price ;
Description : If supply and demand both shift outward, but demand shifts outward more than supply, the equilibrium price (a) will increase and quantity will increase ; (b) will increase and quantity will decrease; (c) will decrease and quantity will decrease ; (d) will decrease and quantity will increase
Last Answer : (a) will increase and quantity will increase ;