MCQOPTIONS
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MCQOPTIONS
This section includes 657 Mcqs, each offering curated multiple-choice questions to sharpen your Testing Subject knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Which of the following class will not be negatively affected by the higher inflation? |
| A. | the consumer class |
| B. | the debtor class |
| C. | pensioner class |
| D. | business class |
| Answer» E. | |
| 2. |
The trough of a business cycle occurs when _____ hits its lowest point. |
| A. | inflation |
| B. | the money supply |
| C. | aggregate economic activity |
| D. | the unemployment rate |
| Answer» D. the unemployment rate | |
| 3. |
Which of the following is an effect of inflation? |
| A. | erosion in purchasing power |
| B. | affects relative price of goods |
| C. | increase in inequalities of income |
| D. | all the above |
| Answer» E. | |
| 4. |
Inflation is the state in which .............................. |
| A. | the value of money decreases |
| B. | the value of money increases |
| C. | the value of the money increases first and then decreases |
| D. | the value of money decreases first and increases later |
| Answer» B. the value of money increases | |
| 5. |
What is Cost-Push inflation? |
| A. | increasing money supply |
| B. | increasing indirect tax |
| C. | population increase |
| D. | expenditure increase unnecessarily. |
| Answer» C. population increase | |
| 6. |
Which of the following cannot be included among the remedies of inflation? |
| A. | better capacity utilization |
| B. | by making low bank rate |
| C. | by reducing budget deficit |
| D. | by making high bank rate |
| Answer» C. by reducing budget deficit | |
| 7. |
Which groups are not protected from inflation? |
| A. | industrial worker |
| B. | agricultural farmers |
| C. | government pensioners |
| D. | saving bank account holders |
| Answer» C. government pensioners | |
| 8. |
How the inflation can be checked temporarily? |
| A. | increase in money supply |
| B. | decrease in money supply |
| C. | increase in wages |
| D. | decrease in tax |
| Answer» C. increase in wages | |
| 9. |
What does the inflation imply? |
| A. | rise in budget deficit |
| B. | rise in prices of consumer goods. |
| C. | rise in money supply. |
| D. | rise in general price index. |
| Answer» E. | |
| 10. |
What is the cause of inflation? |
| A. | if money supply increases. |
| B. | if the production rate falls. |
| C. | if money supply increases and production falls. |
| D. | both money supply and production decreases. |
| Answer» D. both money supply and production decreases. | |
| 11. |
According to the Phillips curve, unemployment will return to the natural rate when: |
| A. | nominal wages are equal to expected wages |
| B. | real wages are back at long-run equilibrium level |
| C. | nominal wages are growing faster than inflation |
| D. | inflation is higher than the growth of nominal wages |
| Answer» C. nominal wages are growing faster than inflation | |
| 12. |
An increase in injections into the economy may lead to: |
| A. | an outward shift of aggregate demand and demand-pull inflation |
| B. | an outward shift of aggregate demand and cost-push inflation |
| C. | an outward shift of aggregate supply and demand-pull inflation |
| D. | an outward shift of aggregate supply and cost-push inflation |
| Answer» B. an outward shift of aggregate demand and cost-push inflation | |
| 13. |
Demand-pull inflation may be caused by: |
| A. | an increase in costs |
| B. | a reduction in interest rates |
| C. | a reduction in government spending |
| D. | an outward shift in aggregate supply |
| Answer» C. a reduction in government spending | |
| 14. |
Keynes assumed the presence of --------- economy for the fundamental law of consumption |
| A. | capitalistic |
| B. | socialistic |
| C. | planned |
| D. | none of the above |
| Answer» B. socialistic | |
| 15. |
Inflation: |
| A. | always reduces the cost of living |
| B. | always reduces the standard of living |
| C. | reduces the price of products |
| D. | reduces the purchasing power of a rupee |
| Answer» E. | |
| 16. |
In the linear consumption function C = a + bY, coefficient ‘a’ denotes |
| A. | mpc |
| B. | apc |
| C. | autonomous consumption |
| D. | induced consumption |
| Answer» D. induced consumption | |
| 17. |
When MPS = 0.2, MPC will be |
| A. | 0.8 |
| B. | 0.2 |
| C. | 1.2 |
| D. | 20 |
| Answer» B. 0.2 | |
| 18. |
In the equation C = 60 + 0.6 Y, MPC is |
| A. | 60 |
| B. | 0.6 |
| C. | 1 |
| Answer» C. 1 | |
| 19. |
Net investment is also known as |
| A. | depreciation |
| B. | induced investment |
| C. | autonomous investment |
| D. | capital formation |
| Answer» E. | |
| 20. |
Who propounded Psychological law of consumption |
| A. | adam smith |
| B. | ricardo |
| C. | keynes |
| D. | pigou |
| Answer» D. pigou | |
| 21. |
In the saving function S = -a + (b)Y, the term ‘b’ denotes |
| A. | saving |
| B. | mpc |
| C. | mps |
| D. | aps |
| Answer» C. mps | |
| 22. |
Psychological law of consumption states that the value of MPC is lies between zero and |
| A. | 1 |
| B. | 2 |
| C. | 3 |
| D. | 4 |
| Answer» B. 2 | |
| 23. |
The concept of effective demand is associated with the name of |
| A. | marshall |
| B. | keynes |
| C. | krugman |
| D. | say |
| Answer» C. krugman | |
| 24. |
The slope of the consumption function is called |
| A. | mpc |
| B. | mps |
| C. | apc |
| D. | aps |
| Answer» B. mps | |
| 25. |
Entrepreneurs will have no tendency to expand or contract output and employment when |
| A. | ad>as |
| B. | ad<as |
| C. | ad=as |
| D. | none of the above |
| Answer» D. none of the above | |
| 26. |
When output exceeds spending: |
| A. | there is unsold output, and level of output will fall |
| B. | there is unsold output, and level of output will rise |
| C. | there is unsold output, and level of spending will rise |
| D. | there is no unsold output since the level of spending will rise |
| Answer» B. there is unsold output, and level of output will rise | |
| 27. |
Which policy is effective in the Keynesian range? |
| A. | monetary policy |
| B. | fiscal policy |
| C. | incomes policy |
| D. | none of these |
| Answer» C. incomes policy | |
| 28. |
According to classical economists, variations in savings are due to: |
| A. | level of investment |
| B. | rate of interest |
| C. | level of employment |
| D. | none of the above |
| Answer» C. level of employment | |
| 29. |
“Supply creates its own demand “is a law of: |
| A. | investment |
| B. | inflation |
| C. | consumption |
| D. | market |
| Answer» E. | |
| 30. |
Supply creates its own demand is the Basis of: |
| A. | classical economics |
| B. | keynesian economics |
| C. | monetarism |
| D. | none of these |
| Answer» B. keynesian economics | |
| 31. |
In classical theory of employment, there is the possibility of: |
| A. | voluntary unemployment |
| B. | no unemployment |
| C. | involuntary unemployment |
| D. | disguised unemployment |
| Answer» B. no unemployment | |
| 32. |
The normal condition of a capitalist economy in classical theory is: |
| A. | underemployment |
| B. | full employment |
| C. | general unemployment |
| D. | frictional unemployment |
| Answer» C. general unemployment | |
| 33. |
In classical theory the equality between saving and investment is brought about by: |
| A. | rate of interest |
| B. | income |
| C. | consumption |
| D. | multiplier |
| Answer» B. income | |
| 34. |
Which of the following is not an assumption of classical theory? |
| A. | price flexibility |
| B. | unemployment |
| C. | say’s law |
| D. | neutrality of money |
| Answer» C. say’s law | |
| 35. |
Excess demand for money, according to Say’s law in the Economy: |
| A. | is greater |
| B. | is very less |
| C. | is equal to zero |
| D. | there is no relationship between excess demand for money and say’s law |
| Answer» E. | |
| 36. |
National Income differs from Net National Product at market price by the amount of: |
| A. | current transfers from rest of the world |
| B. | net indirect taxes (difference between indirect tax and subsidy) |
| C. | national debt interest |
| D. | it does not differ |
| Answer» C. national debt interest | |
| 37. |
In GNP calculation which of the following should be excluded? |
| A. | rental incomes |
| B. | interest payments |
| C. | dividends |
| D. | government transfer payment |
| Answer» E. | |
| 38. |
Net national product at factor cost is also known as: |
| A. | net domestic product |
| B. | gross national product |
| C. | national income |
| D. | personal income |
| Answer» D. personal income | |
| 39. |
Transfer payments refer to payments, which are made: |
| A. | without any exchange of goods and services |
| B. | to workers on transfer from one job to another |
| C. | as compensation to employees |
| D. | none |
| Answer» B. to workers on transfer from one job to another | |
| 40. |
Which of following is not a final good? |
| A. | machinery purchased by dealer |
| B. | machinery purchased by a factory |
| C. | use of petrol |
| D. | washing machine |
| Answer» B. machinery purchased by a factory | |
| 41. |
Which of following is not a part of national income? |
| A. | depreciation |
| B. | net factor income from abroad |
| C. | operating surplus |
| D. | mixed income |
| Answer» B. net factor income from abroad | |
| 42. |
Product method of calculating national income is also known as: |
| A. | income method |
| B. | value added method |
| C. | expenditure method |
| D. | distribution method |
| Answer» C. expenditure method | |
| 43. |
Which of following is not an intermediate goods? |
| A. | wheat |
| B. | gold |
| C. | service of doctor |
| D. | sand and bricks |
| Answer» D. sand and bricks | |
| 44. |
Depreciation is the: |
| A. | loss of vale of fixed assets in use due to normal wear and tear |
| B. | loss of value of fixed assets in use due to normal rate of accidental damages |
| C. | loss of value of fixed assets in the due to foreseen obsolescence |
| D. | all of these |
| Answer» E. | |
| 45. |
Which of following is not included in national income ? |
| A. | factor income |
| B. | rent |
| C. | operating surplus |
| D. | transfer income |
| Answer» E. | |
| 46. |
Piyush’s mother is a teacher. She also teaches Piyush. How would you treat this white calculating national income and domestic income ? |
| A. | it will be included in the national income, but not in the domestic income. |
| B. | it will be included in the domestic income, but not in the national income. |
| C. | it will be included in domestic income as well as national income. |
| D. | it will neither be included in the domestic income nor in the national income. |
| Answer» E. | |
| 47. |
Goods which are not used in the production of other goods are called: |
| A. | capital goods |
| B. | consumption goods |
| C. | producer goods |
| D. | intermediate goods |
| Answer» C. producer goods | |
| 48. |
Which of the following is a synonym of “Undistributed Profits� |
| A. | savings of private corporate sector |
| B. | reserves and surplus |
| C. | retained earnings |
| D. | all of these |
| Answer» E. | |
| 49. |
Which out of the following is not included in estimation of NI? |
| A. | subsidized lunch |
| B. | old-age pension |
| C. | free medical facilities |
| D. | construction of a house |
| Answer» C. free medical facilities | |
| 50. |
Following is an example of final good: |
| A. | flour used by a banker in making biscuits |
| B. | unsold stock of goods lying with the sellers |
| C. | tyres purchased by a transport company |
| D. | mobile sets purchased by a mobile dealer |
| Answer» C. tyres purchased by a transport company | |