MCQs
Total Questions : 150
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Answer: Option C. -> final consumption
Answer: (c)
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist.
Production for self-consumption is a part of the production and hence an income and is also a part of final consumption expenditure.
Answer: (c)
The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist.
Production for self-consumption is a part of the production and hence an income and is also a part of final consumption expenditure.
Answer: Option C. -> AP = MP
Answer: (c)
There is a close relationship between marginal product and average product because both are derived from the total product. When marginal product is equal to average product, the average product is at its maximum.
In the short-run production function, since marginal product starts off as greater than average product and then falls below average product, we can assume that at the “cross-over point,”
when MP = AP, AP is at its maximum.
Answer: (c)
There is a close relationship between marginal product and average product because both are derived from the total product. When marginal product is equal to average product, the average product is at its maximum.
In the short-run production function, since marginal product starts off as greater than average product and then falls below average product, we can assume that at the “cross-over point,”
when MP = AP, AP is at its maximum.
Answer: Option D. -> Negative effect
Answer: (d)
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed.
Normal goods are those for which consumers’ demand increases when their income increases. Cheaper cars are examples of inferior goods.
Answer: (d)
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed.
Normal goods are those for which consumers’ demand increases when their income increases. Cheaper cars are examples of inferior goods.
Answer: Option C. -> J.B. Say
Answer: (c)
Say’s law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767–1832), who stated that “products are paid for with products” and “a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
Answer: (c)
Say’s law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767–1832), who stated that “products are paid for with products” and “a glut can take place only when there are too many means of production applied to one kind of product and not enough to another.
Answer: Option C. -> Primary sector
Answer: (c)
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of manpower substitutes the lack of technology. Besides, farmers are ‘self-employed.’
Answer: (c)
Such a scenario is seen in the case of primary economic activities such as agriculture in the developing countries like India. Most of the primary activities are labour intensive where the volume of manpower substitutes the lack of technology. Besides, farmers are ‘self-employed.’
Answer: Option A. -> Services of a housewife
Answer: (a)Services provided by housewives can be categorized as non-economic services and thus cannot be accounted in national income which is the sum total of all the goods and services produced in a country, in a particular period of time.
Answer: (a)Services provided by housewives can be categorized as non-economic services and thus cannot be accounted in national income which is the sum total of all the goods and services produced in a country, in a particular period of time.
Answer: Option C. -> Labour
Answer: (c)
In economics, the backward bending supply curve is related to labour.
Also known as the backwards-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available.
It shows how the change in real wage rates affects the number of hours worked by employees.
Answer: (c)
In economics, the backward bending supply curve is related to labour.
Also known as the backwards-bending supply curve of labour, This curve models a situation where workers choose to substitute leisure time for work time, i.e. wages, thus reducing the pool of labour available.
It shows how the change in real wage rates affects the number of hours worked by employees.
Answer: Option B. -> Services of night-watchmen
Answer: (b)
National income is the total value of a country's final output of all new goods and services produced in one year.
Services provided by housewives, the income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted for.
Answer: (b)
National income is the total value of a country's final output of all new goods and services produced in one year.
Services provided by housewives, the income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted for.
Answer: Option B. -> increase in capital return
Answer: (b)
Interest rates increase the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables.
In a low interest-rate environment, shares become a more attractive buy, raising households’ financial assets. This may also contribute to higher consumer spending, and makes companies’ investment projects more attractive.
Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
Answer: (b)
Interest rates increase the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables.
In a low interest-rate environment, shares become a more attractive buy, raising households’ financial assets. This may also contribute to higher consumer spending, and makes companies’ investment projects more attractive.
Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
Answer: Option D. -> the value of intermediate consumption
Answer: (d)
Intermediate consumption is an accounting flow that consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses.
Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good or service, because the accounts will show net output by sector of activity.
Because this value must be subtracted from Gross Output to arrive at GDP, how it is exactly defined and estimated will importantly affect the size of the GDP estimate.
Answer: (d)
Intermediate consumption is an accounting flow that consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses.
Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good or service, because the accounts will show net output by sector of activity.
Because this value must be subtracted from Gross Output to arrive at GDP, how it is exactly defined and estimated will importantly affect the size of the GDP estimate.