Competitive Exams: Economics MCQs (Practice-Test 40 of 122)

  1. According to Schumpeter, an enterpreneur earns economic profit because

    1. he is an innovator

    2. all his risks are insurable

    3. uncertainly has been reduced

    4. most of his decision are non-routine

  2. Match List I with List II and select the correct answer using the codes given below the lists:

    List-I List-II
    1. Keynesina theory of distribution.

    2. Time preference theory of interest

    3. Sun-spot theory of trade cycle

    4. Modern theory of income determination

    1. W. S. Javons

    2. J. M. Keynes

    3. N. Kaldor

    4. Bohm-Bawerk

    • A
    • B
    • C
    • D
      • 2
      • 1
      • 4
      • 3
      • 2
      • 4
      • 1
      • 3
      • 3
      • 4
      • 1
      • 2
      • 3
      • 1
      • 4
      • 2
  3. The price of commodity X is regulated at P1 x which is lower than the unregulated price P0 see given figure welfare loss of price regulation is given by the area labelled

    1. 1 and 2

    2. 1 and 3

    3. 2 and 4

    4. 3 and 4

  4. A Pareto optimum distribution of any two goods between any tow individuals in an economy requires that: (symbols have the usual meanings)

    1. MRS1 xy + MRS2 = 1

    2. mrs1MRTTxy

    3. MRS1 xy = MRS2 xy

    4. MRS1 xy = MRS2

  5. According to Pigou, National Dividend will be the maximum when

    1. marginal cost in minimised

    2. net social marginal productivity is maximised

    3. net private marginal productivity is maximised

    4. net social marginal productivity becomes equal to net probate marginal productivity.

  6. A consequence of the kaldor-hicks compensation principle is that a change in the economic policy leads to an improvement in social welfare if the

    1. gainers can compensate the losers for their loss and still remain better-off themselves than they were before

    2. losers can profitably bribe the gainers to induce them to stay in the initial position

    3. gainers can just compensate the losers out of their gains

    4. losers do not oppose the change

  7. transfer payments by the government are NOT included in the net domestic product because

    1. these are gifts from the government to the recipients

    2. their opportunity cost is zero

    3. such payments may not ultimately reach the recipients

    4. no corresponding production of goods and services has taken place to match the payment of such funds

  8. Match List I with List II and select the correct answer using the codes given below the lists:

    List-I List-II
    1. consumption of fixed capital

    2. value added

    3. net income from trade

    4. Domestic product

    1. Gross output less inter-industry purchases

    2. national income in a closed economy

    3. Depreciation

    4. X-M

    • A
    • B
    • C
    • D
      • 3
      • 1
      • 2
      • 4
      • 1
      • 3
      • 2
      • 4
      • 1
      • 3
      • 4
      • 2
      • 3
      • 1
      • 4
      • 2
  9. Which of the following method (s) is/are used to company national income in India?

    1. net output method

    2. Net income method

    3. expenditure method

    Select the correct answer using the codes given below:

    Codes:

    1. 2 alone

    2. 1 and 2

    3. 3 alone

    4. 1, 2 and 3

  10. Assuming that change investment? I = 20 marginal propensity to save (MPS) = 0.5 marginal propensity to investment (MPI) = 0 the change in income? Y will be equal to

    1. 25

    2. 50

    3. 100

    4. 200

  11. In the given diagram, LK represents

    1. deficiency of demand

    2. excess demand

    3. deficiency of supply

    4. excess supply

  12. Given the total investment expenditure an increase the propensity to save will lead to a

    1. fall in the rate interest

    2. fall in income

    3. rise in interest rate

    4. rise in income

  13. if there is an expectation of a rise in the price level, investment will be encouraged because

    1. there will be an increase in the production of capital goods

    2. there will be a rise in the prospective return from capital

    3. people will save more and the interest rate will fall

    4. the cost of production of capital goods will fall

  14. The aggregate demand curve slopes down wards because a increase in price level leads to

    1. reduction in real balances and increase in interest rate

    2. increase in the interest rate and reduction in aggregate spending

    3. reduction in real balances alone

    4. reduction in real balances, increase in interest rate and reduction in aggregate spending