MACROECONOMICS

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MACROECONOMICS
PA-1 EXAM

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vanikasadana12@gmail.com

Vanika Sadana (30-500)

CLASS XII *

C
1.Market prices include :

A) INDIRECT TAXES

B) SUBSIDIES

C) INTERMEDIATE CONSUMPTION

D) DEPRECIATION

2.If in an economy the value of Net Factor Income from Abroad is `200
crores and the value of Factor Income to Abroad is `40 crores. Identify
the value of Factor Income from Abroad.

(a) `200 crores

(b) ` 160 crores

(c)`240 crores

(d) ` 180 crores

3.Supply of money refers to……................. (Choose the correct

alternative)

a)currency held by the public

b) currency held by Reserve Bank of India (RBI)

c)currency held by the public and demand deposits with commercial banks

d)currency held in the government account

4.To reduce credit availability in the economy, the Central Bank may ___

(a) buy securities in the open market.

 (b) sell securities in the open market.

(c) reduce reserve ratio.

(d) reduce repo rate

5.State whether the following statement is true or false: “To reduce

inflation, the Central Bank should reduce Cash Reserve Ratio (CRR).”

True

False

6.‘Inventory is a _____________ variable

A) flow

B) stock

C) both a and b

D) none of the above

7.When Nominal Gross Domestic (GDP) is ₹ 850 crores and Price Index
is 170, Real Gross Domestic Product (GDP) will be ______.

A) 750 crores

B) 800 crores

C) 550 crores

D) 500 crores

8.ASSERTION AND REASONING

ASSERTION : IN NATIONAL INCOME , VALUE OF GOODS AND SERVICES
PRODUCED IN THE ECONOMY ARE CONSIDERED.
REASON :NATIONAL INCOME IS ALWAYS EXPRESSED IN MONETARY
TERMS

a)Both A and R are true and R is the correct explanation of A.

b)Both A and R are true but R is not the correct explanation of A.

c)A is true but R is false.

d)A is false but R is true.

Other:  

9.: Loans offered by commercial banks _________ (increase/ decrease)

the money supply in the economy.

A)INCREASE

B) DECREASE

10.State, whether the given statement is true or false: ‘Unexpected

obsolescence is a component of depreciation.’

True

False

11,Rent + Interest + Profit =_________.

A) GDP AT MP

B) Operating surplus

C) dividends

D) Value added
12.unforseen obsolescence of fixed capital assets during production is :

A) Capital loss

B) Consumption of the fixed capital

C) Income loss

D) None of the above

13.state whether the given statements is true or false i) National

income is always more than the domestic income ii )salary of an Indian
working in Russian embassy in India is included in National Income.

A) both i and ii are true

B) ii is true and i false

C) i is true and ii false

D) both i and ii are false

14.The value of the Nominal Gross National Product (GNP) of an

economy was ₹ 2,500 crores in a particular year. The value of GNP of
that country during the same year, evaluated at the price of base year
was ₹ 3,000 crores. Calculate the value of GNP deflator of the year in
percentage terms

A) 78.23 %

B) 80%

C) 83.33 %

D) 68.34 %
15.While calculating gross domestic capital formation , exports are
included because

A) Exporters are paid for it.

B) It is an final expenditure by the buyers

C) It is an expenditure on domestic product

D ) Exports result in expenditure

16. Monetary policy is the policy of _______

A) Government

B) Central bank

C) commercial bank

D) NABARD

17.A car purchased by a household is a _________

(A) single use capital good

(B) single use consumer good

(C) durable consumer good

(D) semi-durable consumer good

18.Read the following statements - Assertion (A)

and Reason ( R) Assertion (A): Real GDP is
always equal to Nominal GDP.
Reason (R): Real GDP is a better measure to make periodic comparison
in the physical output of goods and services over different years.
 a) Assertion (A) is true and Reason (R) is false.

b) Assertion (A) is false and Reason (R) is true.

c) both Assertion (A) & and Reason (R) are true.

d)both Assertion (A) & and Reason (R) are false

Other:  

19.GNP deflator is represented by which of the following formulae ?

A) Nominal GNP/Real GNP x100

B) Real GNP / Nominal GNP X 100

C) Real GNP/ change in rate of inflation X 100

D)change in rate of inflation / Real GNP X100

20.- _______is the agent and adviser to the Government of India.

A) IMF

B) RBI

C) COMMERCIAL BANK

D) WORLD BANK

21.“Gross Domestic Product (GDP) is not the best indicator of the

economic welfare of a country. ”Defend or refute the given statement
with valid reasons- The given statement can be defended on the
following grounds, as GDP may not take into account: (i)
Non monetary exchanges like services of housewives.(ii)Economic
activities like services of postman (iii) Externalities (benefits/harms)
caused by human activities. (iv) Distribution of Income (GDP).
 A) (ii) & (iv)

B) (i) ,( ii) & (iii)

C)(iii) & (iv)

D) (i) , (iii) & (iv)

22.The sum of factor payments is equal to _______.

(a) Domestic Income

(b) National Income

(c) both (a) & (b)

(d) Per Capita Nominal Income.

23.SLR INCREASEST THEN ______ (increase/decrease) the money

supply in the economy.

A) Increase

B) Decrease

24. Calculate Net Value Added at Factor Cost (NVAFC) from the
following data :S. No. Particulars Amount (in ` crores) (i) Value of Output
=800 (ii) Intermediate Consumption =200 (iii) Indirect taxes= 30 (iv)
Depreciation= 20 (v) Subsidies= 50 (vi) Purchase of machinery =50

A) 670 CRORES

B) 450 CRORES

C) 600 CRORES

D) 890 CRORES
25.Three components of Income from Property and Entrepreneurship :-

A)Rent / Royalty ,Interest, Profit

B) Value of output

C) depreciation / capital loss

D) current account deposit

26.Choose the correct statement : i)Bank rate

is the rate of interest at which central bank lends money to commercial
banks to meet their long term needs.
ii) Bank rate is also called discount rate iii)
Decreasing bank rate discourage borrowers from taking loans

A) (i ) & (ii)

B) (i) & (iii)

C) (ii) & ( iii)

D)( i) , ( ii) & (iii)

27.Combined factor income, which can’t be separated into various

factor income components, is known as ____.

A) Gross capital formation

B) Governtment expenditure

C) Mixed income

D) Domestic income
28.Which of the following is not a ‘factor payment’ ?

(a) Free uniform to defence personnel.

(b) Salaries to the Members of Parliament.

(c) Rent paid to the owner of a building.

(d) Scholarship given to the students.

29. State, whether the following statement is true or false: ‘All financial
institutions are banking institutions’.

True

False

30.If the reserve ratio is 20 % and the primary deposit are Rs 100 the
total lending by the banking system will be___________

A) RS 300

B) RS 500

C) RS 200

D) RS 340

31.Deposit creation by banks come to an end when _____________

A) Legal reserve ratio becomes zero

B) fresh deposits with banks become zero

C) money multiplier becomes zero

D) total reserves equal initial deposits

32.‘Subsidies to the producers, should be treated as transfer payments.’
as :- i) as subsidy is a transfer payment. ii)Subsidy is the financial
assistance provided by the government to producers to fulfil its social
welfare objectives. iii)Government does not get anything in
consideration for the same. iv) It is contributed to the current flow of
goods and services and hence contribute to any value addition. choose
the correct statement :

A) (i) &( ii) are correct and (iii) & ( iv) are incorrect

B) only (iv) is correct

C) ( i) , ( ii) & ( iii ) are correct

D) (i) , (ii) , ( iii) & ( iv) are correct

33.GDP and Welfare Can the GDP of a country be taken as an index of

the welfare of the people of that country? If a person has more income,
he or she can buy more goods and services and his or her material well-
being improves. So it may seem reasonable to treat his or her income
level as his or her level of well-being. GDP is the sum total of value of
goods and services created within the geographical boundary of a
country in a particular year. It gets distributed among the people as
incomes(except for retained earnings). So we may be tempted to treat
higher level of GDP of a country as an index of greater well-being of the
people of that country(to account for price changes, we may take the
value of real GDP instead of nominal GDP). Read the paragraph and
answer the questions given below :

Option 1

33.1 If the nominal GDP of the current year is double the nominal GDP of
base year , the volume of production of the country must have doubled .
true / false
 True

False

33.2 Do you think GDP is a true indicator of welfare?

A) YES

B) NO

33.3 i) If The GDP of the country is rising the welfare of the people will
not increase . ii) if there is inequalities in the distribution of GDP

A) (ii ) is the correct reason of (i)

B) (i) is incorrect

C) (ii) is incorrect

D) (ii) is not a correct reason of (i)

33.4 ___________ Takes into account all the goods and services
produced in a country

A) Consumer price index

B )GDP deflator

C ) whole price index

D) Producer price index

34. The value of money multiplier is equal to _______

A) 1/ CRR
 B) 1/ LRR

C) 1- LRR

D) 1/ SLR

35. The currency issued by the central bank can be held by public or by
the commercial bank, and is called ___________________ which acts as
basis for credit creation.

A) Money supply

B) M3

C) M4

D) High powered money

36.Which among the following is not a quantitative tool to control credit

creation.

A) CRR

B) Margin reqiurement

C) SLR

D) bank rate

37. Components of M1

A) Currency and coins held by the public