MACRO ECONOMICS THEORY (MET) MCQS
S.Y B.COM
SEMESTER - III
ACRO ECONOMICS THEORY
(MET)
UNIT = 3 & 4 MCQS
(1) Which of the following is not a cause of inflation?
a) Slow growth in agricultural output
b) Slow growth industrial output
c) Slow growth in population
d) Rapid growth in costly imports
(2) Who gains in inflation?
a) Saver s
b) Creditor
c) Debtor
d) Pension holder
(3) In an inflationary situation, which of the following measures can the government take to reduce the inflationary gap?
a) Impose higher taxes
b) Reduce government expenditure
c) Increase government expenditure
d) Both a and b above
(4) How does inflation act as a blessing for people who invest by taking loans?
a) Reduction in value of loan repayment amount
b) Increase in value of loan repayment amount
c) Purchasing power increases
d) Rise in interest rates
(5) Which of the following is not a factor for demand pull inflation?
a) Increase in the price of raw materials
b) Increase in money supply
c) Budget deficit
d) Trade surplus
(6) Under which type of inflation does unemployment remain at the minimum in the economy?
a) Cost push inflation
b) Demand pull inflation
c) Demand push inflation
d) Both b and c
(7) Which type of inflation increases the level of unemployment to the maximum in the economy?
a) Demand pull inflation
b) Cost push inflation
c) Both a and b
d) Demand push inflation
(8) Which of the following variable(s) will come under stock variable(s)?
a) Consumer price index
b) Gross domestic product
c) Money supply.
d) Both (a) and (c) above
(9) The relationship between aggregate consumption expenditure and aggregate income of household sector is known as _______ Function.
a) Saving
b) Consumption
c) Expenditure
d) Income
(10) Which of the following variable(s) will come under flow variable(s)?
a) Unemployment
b) Foreign exchange reserves
c) consumption
d) Money supply
(11) The budget multiplier shows the effect of ________ on income.
a) Exports
b) Tax
c) Investment
d) Imports
(12) The permanent income consumption theory Was given by:
a) J.S.Duesenberry
b) J.M.Keynes
c) S.Fischer
d) M Friedman
(13) According to Keynes one of the variables determining the rate of interest is:
a) Supply of money
b) Stock of money
c) Investment
d) Savings
(14) Real wage means money wage divided by _______
a) Salary
b) Cost
c) MPL
d) Price
(15) Which of the following is a part of GDP?
a) Rs. 100 earned by selling shares
b) Rs.100 received by a girl as her pocket money
c) Rs.100 earned by selling good x
d) Rs.100 earned from Gambling
(16) Which of the following is not correct?
a) Personal income - Personal Tax = Disposable income
b) GNP = NNP + Depreciation
c) Disposable income - Consumption = Savings
d) Transfer payment is a part of National income
(17) Taxes can be considered as _______.
a) Rewards
b) Leakages
c) Injection
d) Income
(18) The full equilibrium condition can be stated as _________.
a) L (Y) + I (i) = s
b) C (Y) + l (i) = Md
c) C (Y) + I (i) = K (Y) + (i)
d) Ms = Y
(19) The sum of sales proceeds expected from sales is called ______
a) ADP
b) ASP
c) APS
d) APC
(20) Of the following, which is not an objective of Macro Economics.....
a) Economic growth
b) Employment generation
c) Social welfare
d) Price stability
(21) In the national income accounts, net exports equal:
a) Exported goods less imported services
b) Exported goods & services minus imported services
c) Exported goods & services minus imported goods
d) Exported goods minus imported goods & services
(22) An open economy is one where there is:
a) No foreign transactions
b) No government sector
c) Foreign transaction
d) No Business Sector
(23) According to liquidity preference theory, the increase in money supply _______ the rate of interest.
a) Increases
b) Decreases
c) Do not change
d) Either increases or decreases
(24) In the Keynesian model when income increases by Rs.1000, than consumption expenditure wil.....
a) Increases by Rs.1000
b) Increases by more than Rs.1000
c) Decreases by Rs.1000
d) Increases by less than Rs.1000
(25) The L M curve in the usual case _______
a) Slopes down to the right
b) is horizontal
c) is vertical
d) Slopes up to the right
(26) If S = -100 + 0.2Y and Y = Rs.1000 then the APS is about ________
a) 0.10
b) 0.20
c) 0.15
d) 0.25
(27) The scope of Macro Economics does not involve one of the following:
a) The theory of price level
b) The theory of price determination
c) The theory of employment
d) The problem of inflation
(28) National income usually means:
a) GDP at factor cost
b) GNP at factor cost
c) NNP at factor cost
d) NDP at factor cost
(29) Which of the following is not an example of transfer payment:
a) Unemployment allowance
b) Social security payment
c) House property rent
d) Pension payment
(30) Recession are periods where real GDP;
a) Increases Slowly
b) Increases rapidly
c) Decreases mildly
d) Decreases severely
(31) The statistics used by economist to measure the value of economic output is:
a) The CPI
b) BOP
c) GDP
d) GDP deflator
(32) The total income of every one in the economy is exactly equal to the total
a) Expenditures of economy's output of goods & services
b) Consumption expenditure of everyone
c) Government expenditure
d) Investment expenditure
(33) The net income earned within a domestic region of a country would be equal to:
a) NDP at market price
b) NDP at factor cost
c) NNP at factor cost
d) NNP at market price
(34) The concept of value added is used to calculate:
a) GDP at market price
b) Taxes and subsidies
c) Net factor income from abroad
d) GDP at factor cost
(35) ______ is not an instrument of monetary policy.
a) Bank rate Policy
b) Cash Reserve Ratio
c) Credit policy
d) Taxes
(36) Gross investment includes net investment & ______
a) Depreciation
b) Savings
c) Taxes
d) Subsidies
(37) Life cycle theory was developed by
a) Keynes
b) Friedman
c) Marshall
d) Andu Mudigliani
(38) Deflation is .......
a) a situation of falling prices
b) a situation of rising prices
c) a situation of constant prices
d) None of these
(39) Stagflation is a period of ....
a) High inflation
b) High unemployment
c) Low Unemployment
d) Both a and b above
(40) Customs duty is an instrument of:
a) Fiscal policy
b) Trade policy
c) Revenue policy
d) Monetary policy
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