Questions and answers for exam Preparation

MCQs

Total Questions : 10

Question 1.

Opportunity cost is

the cost incurred in the past before we make a decision about what to do in the future.
the additional benefit of buying an additional unit of a product.
a cost that cannot be avoided, regardless of what is done in the future.
that which we forgo, or give up, when we make a choice or a decision.

Discuss Question

Answer: Option D. -> that which we forgo, or give up, when we make a choice or a decision.
:
D

Option: (d)

Question 2.

Which of the following is not a reason for cost-push inflation?

The payment of dearness allowance to employees
The existence of a large parallel economy
Fluctuations in agricultural and industrial output
Excessive indirect taxation

Discuss Question

Answer: Option A. -> The payment of dearness allowance to employees
:
A

Option: (a)

Question 3.

Among the supply side measures to contain inflation is:

postponing public expenditure
mopping up excess liquidity through taxation
credit control measures of RBI
maintaining price levels through an effective PDS

Discuss Question

Answer: Option D. -> maintaining price levels through an effective PDS
:
D

Option: (d)

Question 4.

Aggregate supply is the total amount:

of products produced by a given industry.
of goods and services produced in an economy.
of labor supplied by all households.
produced by the government.

Discuss Question

Answer: Option A. -> of products produced by a given industry.
:
A

Options: (a)

Question 5.

Microeconomics is not concerned with the behavior of:

consumers
firms
aggregate demand
industries

Discuss Question

Answer: Option C. -> aggregate demand
:
C

Option: (c)

Question 6.

Unemployment means that:

there are some people who will not work at the going wage rate.
people are not willing to work at the going wage rate.
there is excess demand in the labor market.
at the going wage rate, there are people who want to work but cannot find work.

Discuss Question

Answer: Option D. -> at the going wage rate, there are people who want to work but cannot find work.
:
D

Option: (d)

Question 7.

Inflation, in theory, occurs:

when the price of essential commodities outstrips income
when money supply grows at a higher rate than GDP in real terms
when the exchange rate of a currency falls
when fiscal deficit exceeds balance of payment deficit

Discuss Question

Answer: Option B. -> when money supply grows at a higher rate than GDP in real terms
:
B

Option: (b)

Question 8.

Macroeconomics deals with:

the behavior of firms.
economic aggregates.
the activities of individual units.
the behavior of the electronics industry.

Discuss Question

Answer: Option B. -> economic aggregates.
:
B

Option: (b)

Question 9.

Indicate below what is NOT a factor of production.

Land.
Labor.
A bank loan.
Capital.

Discuss Question

Answer: Option C. -> A bank loan.
:
C

Option: (c)

Question 10.

The concept of opportunity cost:

is relevant only for a capitalist economy like the United States.
would be irrelevant if we eliminated poverty.
suggests all our wants can be achieved.
suggests a major increase in public health-care spending means an expansion in other areas will be harder to achieve.

Discuss Question

Answer: Option D. -> suggests a major increase in public health-care spending means an expansion in other areas will be harder to achieve.
:
D

Option: (d)