UCCC & SPBCBA & SDHG College of BCA & IT, Surat

M.C.Q. Question Bank of Macro Economics (English Medium)

S.Y.B.Com.Sem-IV
question answer1 answer2 answer3 answer4
A situation where the rate of Full employment Unemployment Both None of these
involuntary unemployment is
minimal and people are getting
employment at the prevailing wage
rate is known as….....
Short term Long term Both None of these
According to J.B.Say, employment is
a …......period event.
Short term Long term Both None of these
In which period an economy attains
full employment equilibrium ?
Who gave the statement 'Supply Keynes Pigou J.B.Say Adam smith
creates its own demand'?
The economy is Price and wages All units of All of these
at the state of full are variable. labour are
Which are the assumptions of Say's employment. homogeneous.
law of market?
Who has given the theory of wage- Prof.Pigou Prof. Taussing Prof. Marshall Ricardo
cut?
In the determination of income and Demand Supply Effective Effective supply
employment theory Keynes demand
emphasized on ….......
Pigou has recommended ….....to Increase in supply Wage cuts Full Perfect
overcome the the situation of employment competition
unemployment.
In which context the classical Demand Supply Labour Capital
economists has given the theory of
income & employment?
What is the slope of Aggregate Positive Negative Parallel to X axis Parallel to Y axis
Supply Price curve?
The principle of The principle of Law of Market The principle of
Keynesian theory of income and effective demand wage cut effective supply
employment is also known as _____.
Who authoured the book "The Adam Smith David Ricardo J.M.Keynes A.C. Pigou
General Theory"?
The book entitled "The General 1910 1920 1930 1936
Theory" was published in which
year?
Direct Indirect both None of these
What is the relationship between
income and employment, according
to Keynes?
 Effective demand Aggregate Supply Aggregate None of these
A point where the quantity of Price demand price
demand equals to the quantity of
supply of goods is called as _____.
What is the basis of effective Aggregate Supply Aggregate Both None of these
demand? Price Demand Price
Full employment Perfect Unemployment None of these
What happens in the economy when competition
effective demand declines?
Income Price Demand Supply
What determines the propensity to
consume in the economy?
Direct Indirect Proportional None of these
What is the relationship between
income and consumption?
What will be the level of High Low Fix Zero
consumption in short term?
Equal to the unit Less than a unit More than a Immeasurable
What will be the level of marginal unit
propensity to consume when the
increase in consumption is less than
increase in income?
More than unit Less than unit Equal to unit Immeasurable
When the entire increase in the level
of income is spent on consumption
then what will be the marginal
propensity to consume?
Less than unit Equal to unit More than unit Zero
What will be the marginal propensity
to consume when an increase in
consumption is greater than increase
in level of income?
Monetary Real investment Both None of these
In the concept of marginal efficiency investment
of capital what is to be considered?
Marginal efficiency of capital is Expected rate of Interest rate Discount rate None of these
known as …... profit
When the level of investment Increases Decreases Remains Remains Zero
increases then the marginal constant
efficiency of capital …...
Negative Positive Parallel to X axis Parallel to Y axis
What is the slope of the marginal
efficiency of capital curve?
Stock of capital Change in Fiscal policy All of these
What are the factors affecting the goods Population
marginal efficiency of capital?
What steps should be taken to stop Reduction in Abolition of Price support All of these
reducing marginal efficiency of taxes monopoly policy
capital?
Income Demand Price Supply
Consumption is a function of……..
What is the value of marginal Equal to unit Less than unit More than unit Zero
propensity to save and marginal
propensity to consume ?
In what context did Keynes Investment Employment Income Interest rate
introduced the concept of
multiplier?
In what context did Kahan Investment Employment Income Interest rate
introduced the concept of
multiplier?
Marginal Marginal Marginal Marginal cost
The concept of multipler is based on investment propensity revenue
….... toconsume
Due to change in investment of Rs. 2 0.5 5 4
5000 if the change in income is
Rs.10000 then what will be the value
of multiplier?
What is the relationship between Direct Indirect Both None of these
marginal propensity to consume and
multiplier?
Subjective factors Objective factors Both None of these
What are the factors affecting
marginal propensity to consume?
The ratio of increase in income due Investment Employment Real investment None of these
to increase in investment is called as multiplier multiplier
.. …
Which factor is included in the Increase in Price rise Debt All of these
leakages of multiplier? marginal cancallation
propensity to
save
What will be the value of the More Less Zero None of these
multiplier if the marginal propensity
to save is less?
If MPS = 0.25 then what is the value 2 4 3 None of these
of K ?
If MPS = 1/3 then what is the value 3 1 0 6
of K?
If the value of MPS is high then K will High Low Zero None of these
be…....
Keynesian investment multiplier is Income multiplier Consumption Employment None of these
also known as….... multiplier multiplier
What are the assumptions of Closed economy Constant price Constant All of these
Keynesian investment multiplier? level marginal
propensity to
consume
What is the relationship between Indirect Direct Both None of these
multiplier and marginal propensity to
save?
Marginal Marginal Marginal Marginal cost
In the equation of k = 1 / 1- mpc propensity to investment revenue
what does mpc stands for? consume
Changes in total Change in total Employment Primary income
What does ΔN represent in K=ΔN/ΔN employment income multiplier
2?
Who initiated the concept of Prof. R. F. Kahan Prof. Pigou Prof. Keynes J. B.Say
multiplier?
Savings Marginal Supply Employment
In the equation K = 1 / mps , here if K propensity to multiplier
is multiplier then what is mps? save
If there is an increase in investment New income New demand New savings Supply
in the economy then what will
increase?
If the marginal propenstiy to Increases Decreases Remains zero.
consume increases, the value of the constant
multiplier …......
If the marginal propenstiy to Increases Decreases Remains zero.
consume decreases, the value of the constant
multiplier ….....
If MPC = 0.5 then what is the value 2 4 1 3
of K?
If MPC = 0.8 then what is the value 2 4 5 0.5
of K?
Haberler Keynes Mitchell Robbines
"An alternate period of prosperity &
depression in the economy is called
trade cycles." Who has given this
definition of trade cycles?
Which are the types of business Seasonal Cyclical Secular trends All of these
cycles? Fluctuations Fluctuations
Which are the features of business Macro in nature Rythemic Regularity All of these
cycles?
Which are the phases of the business Recovery Prosperity Recession All of these
cycles?
Increases Remains stable Decrease None of these
In the time of prosperity, the velocity
of circulation of money .......
Which factors are responsible for Internal factor External factor Both None of these
recession?
What will be the effect of recession Decrease in Decrease in Decrease in All of these
in the economy? production investment employment
Which type of product is more prone Steel Machine Electrical goods All of these
to recession?
Recovery Prosperity Contraction Recession
Which phase comes after the
depression in the business cycle?
What is seen in the phases of trade Regularity Irregularity Both None of these
cycles?
Trade cycles is a …...... process in the Economic Financial Social Political
economy.
What are the stages of the business Expansion Contraction Both None of these
cycle according to Berners and
Mitchell ?
Prosperity Depression Recession All of these
Which are the phases of trade cycles
according to Prof. Schumpeter?
Business cycles Balance of trade Balance of None of these
Expansion & contraction in the payments
economic activities is called as ….....
In trade cyles how many types are 2 3 4 5
there?
During the time of prosperity Increases Decreases Both None of these
production, employment & income
….....
Which phase comes after recovery in Prosperity Depression Recession None of these
trade cycles?
Big strikes Wars Natural All of these
Which are the factors responsible calamities
for irregularity in trade cycles?
Economic Social Political Institutional
Which types of trnasactions are
included in balance of payments?
State the equation of balance of Expenditure + Income - Income + Receipts -
payments. Income Expenditure Payments Payments
What is the situation under surplus Receipts = Receipts > Receipts < None of these
balance of payments? Payments Payments Payments
What is the situation under deficit Receipts = Receipts > Receipts < None of these
balance of payments? Payments Payments Payments
Receipts = Receipts > Receipts < None of these
When there will be an equilibrium in Payments Payments Payments
balance of payments?
What type of accounts are found in Current account Capital account Both None of these
balance of payments?
Goods Services Both None of these
What is included in balance of trade?
 Current account Capital account Both None of these
In balance of payments visible goods
are included in which account?
In balance of payments invisible Capital account Current account Both None of these
services are included in which
account?
Visible & invisible items are included Balance of Balance of trade Both None of these
in …...... payments
2 3 4 5
How many types of disequilibrium in Temporary or transitory Cyclical
balance of payments are found Secular
based on time? Fundamental Structural
Which are the remedies to correct Autonomous Accomodating Both None of these
disequilibriiunm in balance of transactions transactions
payments?
Which are the factors responsible for Trade cycles Natural Population All of these
disequilibrium in balance of calamities growth
payments?
Under the situation of inflation what Surplus Deficit Balance None of these
will be the condition in balance of
payments?
What will be the situation in balance Surplus Deficit Balance None of these
of payments during prosperity phase
?
Surplus Deficit Balance None of these
What will be the situation of balance
of payments during depression ?
What are the corrective measures to Monetary Non-monetary Both None of these
remove deficit in balance of measures measures
payments?
Which method is not included in Deflation Exchange control Devaluation of Export promotion
monetary measures? currency
Which method is not included in non- Export promotion Tariff Exchange Import
monetary measures? control restrictions
Which tool gives the actual Balance of Balance of trade Budget Planning
international economic condition of payments
any country?
Deflation Money Devaluation Depression
When a country reduces the value of expansion
domestic currency in terms of
foreign currency is called as …....
Price elasticity of International Price stability All of these
The success of devaluation policy demand cooperation
dependes on which factors?
When a country adopts the Export will rise Imports will Both None of these
monetary measures to remove reduce
adverse balance of payments then
…..
When a currency of one country is Exchange Rate Rate of interest Discount rate Inflation rate
exchaged with other country's
currency such type of exchange is
known as …...
There are how many theories for 2 3 4 5
exchage rate determination?
Demand & Demand & Demand & Demand & supply
Supply of goods supply of supply of money of foreign
In a free market economy exchange services currency
rate is determined by ….......
Who has given the purchasing power Adam Smith Gustav Cassel J. M. Keynes A.C. Pigou
parity theory?
1800 1912 1918 1920
In which year the purchasing power
parity theory was propounded?
Gustav Cassel belongs to which America India France Sweeden
country?
Internal External Base rate of Current rate of
The absolute version of purchasing Purchasing purchasing exchange exchange
power parity theory emphazised on power power
which factor for determination of
foreign exchange rate?
Internal External Base rate of Current rate of
The relative version of purchasing Purchasing purchasing exchange exchange
power parity theory emphazised on power power
which factor for determination of
foreign exchange rate?
How many versions are there in 2 3 4 5
purchasing power parity theory?
New exchange Base yearrate of Current year Previous year's
What does Rto stands for in the rate exchange rate of exchange rate of exchange
equation Rt1 = Rto x Pa / Pb?
New exchange Base year rate of Rate of Previous year's
What does Rt1 stands for in the rate exchange exchange rate of exchange
equation Rt1 = Rto x Pa / Pb?
When there is an inflation in home Appriciate Depriciate Remains Can't say
country, the domestic exchange rate constant
will …...
When there is a decrease in prices of Appriciate Depriciate Remains Can't say
home country, the domestic constant
exchange rate will …...
When there is an inflation in foreign Appriciate Depriciate Remains Can't say
country, the domestic exchange rate constant
will …...
When there is a decrease in prices of Appriciate Depriciate Remains Can't say
foreign country, the domestic constant
exchange rate will …...
Visible goods Invible services Both None of these
In the purchasing power parity
theory …..... is included in the
determination of foreign exchage.
Public revenue Public Public debt All of these
What is included into the subject expenditure
matter of public finance?
The burden of tax are of how many 2 3 4 5
types?
Tax Income Tariff None of these
A part form individual's income
which is collected compulsorily by
the government is known as …..
Incidence of tax Impact of tax Shifting of Tax Tax evasion
The immidiate effect/burden of tax,
falling on a person is known as …...
Incidence of tax Impact of tax Shifting of Tax Tax evasion
The final or last effect/burden of tax,
falling on a person is known as …...
The process in which a tax payer Incidence of tax Impact of tax Shifting of Tax Tax evasion
shifts the burden of tax on some
other person is known as …...
What is mean by the direct monetary Incidence of tax Impact of tax Shifting of Tax Tax evasion
burden of tax?
How many types are there of shifting 2 3 4 5
of tax?
Backward shifting Forward shifting Incidence of tax Impact of tax
When the government impose a tax
on producer & this tax producer shift
on consumers, such type of shifting
of tax is called as …...
When the burden of tax is shifted Backward shifting Forward shifting Incidence of tax Impact of tax
from consumers to prodcucers it is
known as …....
Forward tax & backward tax are the Incidence of tax Impact of tax Shifting of Tax Tax evasion
types of what?
Direct tax Indirect tax Ad velorum tax Specific tax
When the government imposes the
tax on the income of a person, such
type of tax is called as …...
When the government imposes the Direct tax Indirect tax Ad velorum tax Specific tax
tax on goods, such type of tax is
called as …...
Based on tax base, how many types 2 3 4 5
of tax exsist ?
Based on administration, how many 2 3 4 5
types of tax exsist ?
Proportional tax Progressive tax Regressive tax Direct tax
When the tax rate imposed by the
government on person's income
remains same irrespective to the tax
base, such type of tax is called as ….
Proportional tax Progressive tax Regressive tax Direct tax
As the person's income increases &
with that if tax rate also increase,
such type of tax is called as …...
Proportional tax Progressive tax Regressive tax Direct tax
As the person's income increases &
with that if tax rate also decrease,
such type of tax is called as …...
When tax is imposed based on the Ad velorum tax Specific tax Direct tax Indirect tax
value of goods, such type of tax is
called as …....
When tax is imposed based on the Ad velorum tax Specific tax Direct tax Indirect tax
weight or size of goods, such type of
tax is called as …....
What is the slope of proportional tax Positive Negative Parallel to X axis Parallel to Y axis
rate curve?
What is the slope of progressive tax Positive Negative Parallel to X axis Parallel to Y axis
rate curve?
What is the slope of regressive tax Positive Negative Parallel to X axis Parallel to Y axis
rate curve?
Price elasticity of Degree of Nature of tax All of these
Which are the factors affecting demand & supply market
incidence of tax? competition
Buyer Seller Both None of these
If the price elasticity of demand of
taxable goods is perfectly elastic on
whom the burden of tax will fall?
Buyer Seller Both None of these
If the price elasticity of demand of
taxable goods is perfectly inelastic on
whom the burden of tax will fall?
Buyer Seller Both None of these
If the price elasticity of supply of
taxable goods is perfectly elastic on
whom the burden of tax will fall?
 Buyer Seller Both None of these
If the price elasticity of supply of
taxable goods is perfectly inelastic on
whom the burden of tax will fall?
Public revenue Public Public Debt All of these
When the government does any kind expenditure
of spending it is called as …...
To maintain law To do the public Industrial All of these
What are the objectives of public & order administration development
expenditure?
What are the reasons for the growth Population Urbanization Inflation All of these
of public expenditure? growth
What are the reasons not Urbanization Inflation Raising living Population
responsible for the growth of public standards of growth
expenditure? people
What are included in the effects of Production Distribution Other effects All of these
public expenditure?
The borrowing taken by the Personal debt Public debt Institutional Social debt
government is known as ….... debt
What are the reasons for the growth War Natural Economic All of these
of public debt? calamities development
Internal & Compulsory & Productive & All of these
external debts voulntary debts unproductive
Which are the types of public debt? debts
Burden of tax are of how many 2 3 4 5
types?
Zero Equal to unit Less than unit More than unit
What should be the internal burden
of direct monetary debt?