Competitive Exams: Economics MCQs (Practice-Test 52 of 122)

  1. Which one of the following statement is correct in respect of equation of exchange MV = PT?

    1. If M is double, leaving V and T unaffected, then P must double

    2. If M is doubled, leaving v unaffected, then P will be halved

    3. If M and T are doubled, leaving v unaffected, then P will be halved

    4. If M is doubled, V is halved, laving t unaffected, then P gets multiplied 3 times

  2. Match List I (name of the Economist) with List II (concept/theory) and select the correct answer:

    List-I List-II
    1. A W Phillips

    2. Findlay Shirras

    3. J M Keynes

    4. R S Sayers

    1. Central Bank

    2. Trade-off between wage and unemployment rate

    3. theory of profit

    4. Taxable capacity

    5. liquidity trap

    • A
    • B
    • C
    • D
      • 5
      • 4
      • 1
      • 2
      • 2
      • 3
      • 5
      • 1
      • 5
      • 3
      • 1
      • 2
      • 2
      • 4
      • 5
      • 1
  3. The Central Bank can decrease the bank credit component of the money supply by

    1. lowering the cash reserve requirements

    2. increasing the bank rate

    3. lowering the bank rate

    4. buying of government securities by the

    Central Bank

  4. Which one of the following can be called as an instrument of selective credit control?

    1. Fixing statutory liquidity requirements

    2. Variation of bank reserve ratio

    3. Fixing of margins for lending against specific securities

    4. Altering discount rate

  5. Which one of the following represents capital adequacy ratio for commercial Banks?

    1. Ratio of capital to risk-weighted assets

    2. Ratio of capital to short-term deposits

    3. Ratio of capital to non-term deposits

    4. Ratio of capital to non-performing assets

  6. Derivative deposit means

    1. cash deposited in a bank by an employee of a business firm

    2. deposits created by a commercial Bank out of its borrowings from the RBI.

    3. cash deposited in a bank by another Commercial Bank

    4. deposits created by a bank out of its credit provided to the customer of the bank

  7. Which one of the following is generally regarded as the true index of economic growth?

    1. An increase in national income at constant prices during a year

    2. a sustained increase in real per capita income

    3. an increase in national income at current prices over time

    4. an increase in national income along with increase in population.

  8. Marx refers to the concept of organic composition of capital. Which one of the following ratios stands for this (where C is Constant capital, V is variable capital and s is surplus value)

    1. C V + S

    2. C V

    3. () C C + V

    4. (C V)

    V +

  9. Which one of the following factors is stressed by Schumpeter in his theory of economic growth?

    1. Innovations

    2. Laissez-faire

    3. population growth

    4. surplus value

  10. The ‘Big-push’ strategy of development was first advocated by

    1. Rosenstein Rodan

    2. Simon Kuznets

    3. W A Lewis

    4. A O Hirschman

  11. Consider the following statements: The effect of a tariff is to

    1. raise the domestic price

    2. reduce consumption

    3. increase imports

    Which of the above statements are correct?

    1. 1 and 2

    2. 2 and 3

    3. 1 and 3

    4. 1, 2 and 3

  12. Which one of the following statements is NOT correct?

    1. Free Trade Area among a group for countries means that they eliminate import tariffs against one another but maintain their original tariff levels against the rest of the world.

    2. customs Union among a group of countries means that they eliminate import tariffs against one another, coordinated their macro-policies and impose a common tariff wall against the rest of the world.

    3. In a common market the member countries eliminate import tariffs against one another, allow free mobility of factors between them and maintain a common tariff was against the rest of the world.

    4. In a Economic Union, the member countries eliminate import tariffs against one another, allow free mobility of factors between them, coordinate their macro-policies and maintain a common tariff wall against the rest of the world

  13. For a large trading country, optional tariff argument is based on the proposition that a tariff imports

    1. lowers the country's terms of trade

    2. improves the country's terms of trade

    3. leaves the country's terms of trade unchanged

    4. fails to protect the imports competing industries.

  14. Suppose, a country has adopted freely floating exchange a system. Then, ceteris paribus, if price level in the country rises lads to a

    1. rise in the demand for the country's currency and currency depreciates

    2. rise in the demand for country's currency and currency appreciates.

    3. fall in the demand for country's currency and currency

    4. fall in the demand for country's currency and currency depreciates

  15. Which one of the following pairs is NOT correctly matched?

      • MFA
      • Agricultural Free Trade
      • UNCTAD
      • Free Trade Area
      • IMF
      • Balance of Payments Difficulties
      • MFN
      • Direct foreign

Investment