Question 1

When output exceeds spending:

Accepted Answer

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 
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 A

Question 2

Psychological law of consumption states that the value of MPC is lies between zero and

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4 A

Question 3

According to the Phillips curve, unemployment will return to the natural rate when:

Accepted Answer

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 
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 B

Question 4

In the equation C = 60 + 0.6 Y, MPC is

Accepted Answer

A) 60 
B) 0.6 
C) 0 
D) 1 
A) 60 
B) 0.6 
C) 0 
D) 1

Question 5

An increase in injections into the economy may lead to:

Accepted Answer

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 
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

Question 6

Which groups are not protected from inflation?

Accepted Answer

A) industrial worker 
B) agricultural farmers 
C) government pensioners 
D) saving bank account holders 
A) industrial worker 
B) agricultural farmers 
C) government pensioners 
D) saving bank account holders

Question 7

Who propounded Psychological law of consumption

Accepted Answer

A) adam smith 
B) ricardo 
C) keynes 
D) pigou 
A) adam smith 
B) ricardo 
C) keynes 
D) pigou

Question 8

The concept of effective demand is associated with the name of

Accepted Answer

A) marshall 
B) keynes 
C) krugman 
D) say 
A) marshall 
B) keynes 
C) krugman 
D) say

Question 9

Keynes assumed the presence of --------- economy for the fundamental law of consumption

Accepted Answer

A) capitalistic 
B) socialistic 
C) planned 
D) none of the above 
A) capitalistic 
B) socialistic 
C) planned 
D) none of the above

Question 10

When MPS = 0.2, MPC will be

Accepted Answer

A) 0.8 
B) 0.2 
C) 1.2 
D) 20 
A) 0.8 
B) 0.2 
C) 1.2 
D) 20

Question 11

Demand-pull inflation may be caused by:

Accepted Answer

A) an increase in costs 
B) a reduction in interest rates 
C) a reduction in government spending 
D) an outward shift in aggregate supply 
A) an increase in costs 
B) a reduction in interest rates 
C) a reduction in government spending 
D) an outward shift in aggregate supply

Question 12

Which of the following cannot be included among the remedies of inflation?

Accepted Answer

A) better capacity utilization 
B) by making low bank rate 
C) by reducing budget deficit 
D) by making high bank rate 
A) better capacity utilization 
B) by making low bank rate 
C) by reducing budget deficit 
D) by making high bank rate

Question 13

Entrepreneurs will have no tendency to expand or contract output and employment when

Accepted Answer

A) ad>as B) adas B) ad

Question 14

In the linear consumption function C = a + bY, coefficient 'a' denotes

Accepted Answer

A) mpc 
B) apc 
C) autonomous consumption 
D) induced consumption 
A) mpc 
B) apc 
C) autonomous consumption 
D) induced consumption

Question 15

Inflation:

Accepted Answer

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 
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

Question 16

How the inflation can be checked temporarily?

Accepted Answer

A) increase in money supply 
B) decrease in money supply 
C) increase in wages 
D) decrease in tax 
A) increase in money supply 
B) decrease in money supply 
C) increase in wages 
D) decrease in tax

Question 17

What is the cause of inflation?

Accepted Answer

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. 
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.

Question 18

Which policy is effective in the Keynesian range?

Accepted Answer

A) monetary policy 
B) fiscal policy 
C) incomes policy 
D) none of these 
A) monetary policy 
B) fiscal policy 
C) incomes policy 
D) none of these

Question 19

What does the inflation imply?

Accepted Answer

A) rise in budget deficit 
B) rise in prices of consumer goods. 
C) rise in money supply. 
D) rise in general price index. 
A) rise in budget deficit 
B) rise in prices of consumer goods. 
C) rise in money supply. 
D) rise in general price index.

Question 20

In the saving function S = -a + (b)Y, the term 'b' denotes

Accepted Answer

A) saving 
B) mpc 
C) mps 
D) aps 
A) saving 
B) mpc 
C) mps 
D) aps

When output exceeds spending:

Psychological law of consumption states that the value of MPC is lies between zero and

According to the Phillips curve, unemployment will return to the natural rate when:

In the equation C = 60 + 0.6 Y, MPC is

An increase in injections into the economy may lead to:

Which groups are not protected from inflation?

Who propounded Psychological law of consumption

The concept of effective demand is associated with the name of

Keynes assumed the presence of --------- economy for the fundamental law of consumption

When MPS = 0.2, MPC will be

Demand-pull inflation may be caused by:

Which of the following cannot be included among the remedies of inflation?

Entrepreneurs will have no tendency to expand or contract output and employment when

In the linear consumption function C = a + bY, coefficient 'a' denotes

Inflation:

How the inflation can be checked temporarily?

What is the cause of inflation?

Which policy is effective in the Keynesian range?

What does the inflation imply?

In the saving function S = -a + (b)Y, the term 'b' denotes

Key Concepts in Macroeconomics and Economic History

National Income and GDP Calculation in India

National Income and Classical Theory of Employment

Understanding Inflation, Business Cycles, and Monetary Policy

International Trade Theories and Concepts

Understanding Terms of Trade and International Trade Policies

International Trade Policies and Organizations

International Trade and Economic Policies

Balance of Payment and International Trade

International Trade and Finance

Understanding Foreign Exchange Market and Exchange Rate Systems: Part 1

Understanding Foreign Exchange Market and Exchange Rate Systems: Part 2

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Exam 4: Economic Concepts and Policies

When output exceeds spending:

Psychological law of consumption states that the value of MPC is lies between zero and

According to the Phillips curve, unemployment will return to the natural rate when:

In the equation C = 60 + 0.6 Y, MPC is

An increase in injections into the economy may lead to:

Which groups are not protected from inflation?

Who propounded Psychological law of consumption

The concept of effective demand is associated with the name of

Keynes assumed the presence of --------- economy for the fundamental law of consumption

When MPS = 0.2, MPC will be

Demand-pull inflation may be caused by:

Which of the following cannot be included among the remedies of inflation?

Entrepreneurs will have no tendency to expand or contract output and employment when

In the linear consumption function C = a + bY, coefficient 'a' denotes

Inflation:

How the inflation can be checked temporarily?

What is the cause of inflation?

Which policy is effective in the Keynesian range?

What does the inflation imply?

In the saving function S = -a + (b)Y, the term 'b' denotes

Key Concepts in Macroeconomics and Economic History

National Income and GDP Calculation in India

National Income and Classical Theory of Employment

Understanding Inflation, Business Cycles, and Monetary Policy

International Trade Theories and Concepts

Understanding Terms of Trade and International Trade Policies

International Trade Policies and Organizations

International Trade and Economic Policies

Balance of Payment and International Trade

International Trade and Finance

Understanding Foreign Exchange Market and Exchange Rate Systems: Part 1

Understanding Foreign Exchange Market and Exchange Rate Systems: Part 2

Filters